Crude oil price ended Tuesday with another -1.7% decline to 62.93 as driven by increase in fuel supply, slides in stock markets and strength in USD. Other energies followed suit with natural gas, heating oil and gasoline plunging -1.7%, -1.6% and -0.4% to 3.43, 1.6 and 1.73, respectively. Since Jun 30, the black gold has dropped for 6 consecutive days by -12%. We do not see any sign of reversal yet but a temporary support may be seen around 60 level.

Inventory report from American Petroleum Institute showed than gasoline stockpiles rose for another week by +0.77 mmb to 212.4 mmb. API indicated gasoline inventory has surged for 6 straight weeks and although the pace of increases over the past 2 weeks has slowed down, it indicated that supply was too abundant and was not able to be absorbed. Distillate stockpile rose 3.42 mmb to 158 mmb and it may lead to negative surprise in the US Energy Department (EIA)'s report today. Although crude oil inventory drew -1.4 mmb last week, it was much lower than the -6.82 mmb decline in the prior week. As we mentioned before, lower margin will eventually reduce crude demand.

Stock markets tumbled Tuesday amid concerns that 2Q09 earnings will miss expectation. Dow Jones Industrial Average -1.94% to 8164 while S&P 500 plunged -1.97% to 881.03, the lowest level since May 1. The sector that got the biggest hit was technology sector after a report showed that IT spending will drop -6% this year. Today in Asia, the weakness has been extended and the MSCI Asia Pacific slips -1.8%. In Japan, the Nikkei 225 Stock Average loses -28% to 9428 as the nation's machinery orders contracted -3% mom, compared with consensus of +2.4%, in May after declining -5.4% a month ago. Shares in Australia and Hong Kong also tumble as investors concern that global recovery will be delayed.

Perhaps the most positive news throughout the day was EIA's forecasts upgrade in its monthly report. The agency raised its estimates on world oil demand to 83.85M bpd in 2009, compared with 83.68M bpd projected last month. The reason for EIA to raise its forecast for the second month was stronger than expected growth in Asian economic activities.

Concerning price forecasts, EIA expected WTI crude oil price will average near 70 in 2H09 (1H09: around 58) and near 72 in 2010. In June's report, the agency's respective forecasts were 67 in 2H09 and 67.42 in 2010.

Gold price edged +0.5% higher to settle at 929.1, suggesting near-term support is seen at 900-920 level. Other precious metals continued the fall with sliver sliding -0.1% to 13.22 while platinum and palladium losing -1% and -0.9% to close at 1135.8 and 240.5, respectively. USD remained strong against the euro as well as other higher yield currencies because risk-averse investors seek shelter from USD.