Despite an attempt to test the 48.83 high made on Monday, crude oil's rally lost momentum and ended up retreating to 45.71 (intraday high at 48.32), losing 2.9%, yesterday. Reports reiterating gloomy outlook on world economic as well as increasing uncertainty on OPEC's decision next week drove investors away from the black gold. In Asian morning, the benchmark contract trades narrowly around 45.5/46 with bias on the downside.

IMF said in its March 8 report that global economic growth will contract for the first time since World War II, in contrast with what the organization's projection of 0.5% growth in January, while trade will decline by the most in 80 years. According to Dominique Strauss-Kahn, Managing Director of IMF, stated that the slump this year will be the worst 'in most of our lifetimes'. Moreover, the US Energy Department took down its estimates on 2009 oil demand to an average of 84.27M bpd, the lowest level since 2005, from 84.7M bpd projected in the previous month. At the same time, the Department also anticipated lower natural gas consumption, mainly driven by the 6% decline in industrial use in 2009.

Investors became less confident that OPEC would cut production next week after comments by some of the organization members. Representatives from both Qatar and Saudi Arabia indicated that they insist strict compliance before further production cuts will be considered.

At US session, the Energy Department will report petroleum inventory for the week ended Mar 6. According to Bloomberg's survey, crude stockpile probably rose 0.25 mmb, compared with the forecast of another week of reduction yesterday). For gasoline and distillate, inventory are anticipated to have dropped 1mmb and gained 0.2 mmb, respectively.

Gold price for April delivery continues to be pressure by 900 level in Asian mourning. On Tuesday, the precious metal got hammered and slid 2.5% to close at 895.5, the first close below 900 since Feb 9. Increase in risk appetite drove investors to equity markets from safe-haven assets. Throughout the day, the dollar also retreated to 1.282 against the euro before rebounding.

Stock markets rallied as led by financial shares. Citigroup yesterday announced the bank operated at a profit in the first 2 months of 2009, the best performance since 3Q07. DJIA and S&P 500 advanced 5.8% and 6.4% respectively.

Today in Asia, stocks extend yesterday's rally with the MSCI Asia Pacific Index gained 2.8% and Japan's Nikkei Stock Average surged 4.6%. In Hong Kong, HSBC added another3.5% following a 14% gain yesterday. The gauge tumbled 24% to HK$33/share, the lowest level in more than a decade, Monday.

We believe the equity market will resume downtrend again as corporate will be reporting worse-than-expected quarterly/ half-yearly earning in March and in June and this will stimulate another round of selloff. Moreover, global economic outlook remains weak, we do not believe tumbles in stock markets have ended last week.