Crude oil price extends further weakness Monday and drops to as low as 66.85, the lowest level in 2 weeks, as the disappointing US confidence data triggered worries about demand outlook. Although a tropical storm near the Gulf of Mexico poses threat to oil supplies, the sentiment has dramatically turned bearish on oil market as stocks fall while the dollar rebounds.

Stocks in Asia plummet with the MSCI Asia Pacific Index sliding more than -2%. In Japan, the Nikkei 225 Stock Average plunged -2.5% to 10333 after the government reported a less-than-expected economic growth in 2Q09. GDP grew +0.9% qoq, compared with consensus of +1%, following a -3.8% contraction in the prior quarter. On annualized rate, the gauge expanded +3.7%, compared with +3.9% as anticipated, after declining -14.2% in the first quarter. In Hong Kong, the Hang Seng Index also plunges -2.8% to 20310 as driven by correction in stocks in China.

According to the National Hurricane Centre, Tropical Storm Claudette was about 95 miles southeast of Pensacola and may strengthen as it approaches the Florida coast. Moreover, Tropical Storm Bill in the mid Atlantic may strengthen to a hurricane too.

Currently trading at 945.5, the benchmark contract for gold declines for the second consecutive day as USD rebounds. Against the euro and pound, the greenback pares losses made in the previous week as investors take profit from high-yield assets. The Australian dollar also sinks after making a 11-month high at 0.8477 last week as the RBA governor’s speech spurred speculations on rate hike.

Commitments of Traders
  • Crude Oil: Net speculative long positions declined to 27077contracts after rising to 5-week high in the prior week. The deep correction since last week suggested further reduction in net long positions is likely in the coming week
  • Natural Gas: Net shorts increased trimmed modestly but still remained in high level. The trend is still bearish as investors remained concerned about the huge gas storage
  • Gold: Net speculative long positions trimmed slightly but remained at high level. As gold price plunged in tandem with other commodities, sharper decline in net long positions in the coming week may be seen
  • Silver: Net speculative long positions for silver rose to 8-week high at 27810 contracts. Improvement in economic outlook, should benefit silver more than gold as the former has been widely used in industrial applications
  • Platinum: Net long positions rose to record high level of 12972 contracts last week. Signs of recovery in auto sector fueled speculations on better demand outlook