Despite a rebound Tuesday, WTI crude was not able to regain $50/bbl (yesterday's high 49.94) and settled at 49.66, +2.5%. In Asia morning Wednesday, the black gold continues to trade below 50 with a soft tone as the market expects another week of inventory gain will be shown in today's report by the US Energy Department.

API yesterday reported its estimates on petroleum stockpile for the week ended Mar 27. Crude oil inventory rose 3.276 mmb , higher than market expectation of 2.482 mmb, to 3.276 mmb due to 0.362 mmb increase in imports and 0.163 mmb decline in refinery runs. However, stockpiles at Cushing continued to draw, by 0.622 mmb in the week. For refinery products, outcomes were rather disappointing with gasoline inventory drew 0.451 mmb, less than consensus of a 1.338 mmb decline, while inventory for distillate gained 1.776 mmb, compared with analysts' forecast of 0.767 mmb withdrawal. The set of results signaled oversupply is still haunting in oil market. Despite OPEC's production cuts and high compliance, demand has deteriorated at a much faster pace.

According to Bloomberg, the majority of analysts expected crude inventory should have climbed 3 mmb for the week ended Mar 27, after gaining 3.3 mmb in the previous week, to 359.6 mmb. Stockpiles for both gasoline and distillate are anticipated to have dropped.

After diving to 6-year low last week, natural gas price recovered modestly with thin trading these few days. Although price gained 1% to settle at 3.776 Tuesday as driven by recovery in crude oil price and stock markets, we believe outlook for gas remains bearish at least for the coming few months as industrial production and power generation needs have contracted severely amid global recession.

Gold for June delivery rebounded by 0.8% to close at 925 yesterday as the dollar weakened after a set of disappointing economic data. The dollar index retreated to 85.43 as the greenback lost ground against the euro and the pound.

S&P/CS Compositve-20 housing price index plunged by a record-19% yoy in January , worse than -18.5% in consensus and in December. Moreover, both Chicago PMI and consumer confidence in March were lower than market expectation with the former coming in at 31.4 (consensus: 35. February: 34.2) and the latter at 26 (consensus: 28, February: 25).

Not only China, other countries with large reserve in the USD also worry about the stability of the dollar. According to IMF, dollar accounted for 64% of the reserves held by central banks around the world at the end of December 2008, 0.4% lower than that at the end of September 2008. During the same period, shares of yen and euro gained.