Rebounds in stock markets and bullish oil inventory data initially pushed energy prices higher. However, the rallies lacked follow-through and most in the energy complex ended lower Thursday. Expired yesterday, WTI crude oil for September delivery added +0.2% to 72.54. However, the most active October contract dropped -1.2% to 72.91. RBOB gasoline and heating oil plunged -2.6% and -1.7% to 1.98 and 1.89, respectively. Natural gas dived -5.6% and closed below 3 for the first time since 2002 on supplies concerns.

US economic data were mixed. Philly Fed Survey improved strongly to 4.2 in August, compared with consensus of -2, from -7.5 in the prior month. The increase, together with improvement of Empire States Index to 12.1 from -0.6, suggested that manufacturing sectors have turnaround. It's highly likely that ISM manufacturing index will rise above 50, an indication of expansion, in August.

On the other hand, initial jobless claims rose to 576K in the week ended August 15 from a revised 561K in the previous week. The result was worse than consensus of a contraction to 550K.

Natural gas inventories rose 52 bcf to 3204 bcf in the week ended August 14. Although it was largely inline with market expectation, supplies were 19% higher than the 5-year average.

Gold price slid -0.3% to settle at 941.7. Recently, the yellow metal has traded sideways and without direction. We believe it due to little change in USD's movement. Moreover, gold's correlation with EURUSD has risen. That means in the near-term, gold's performance will be more dependent on USD's outlook.

Stock market declines again in Asia with the MSCI Asia Pacific Index losing -0.6%. Over the week, the gauge probably drops -3%. In Japan, the Nikkei 225 Stock Average plunges -2% to 10179 as driven by declines in auto stocks. The US Government announced that the 'cash for clunkers' vehicle trade-in program will end next Monday. The market worries the auto sector, as well as the US economy as a whole, will not be able to keep up with the pace of recovery as the program finishes.

In Hong Kong, Hang Seng Index slips -1.5% despite recovery in China stock market. The Hong Kong listed China Mobile led the fall as the management said that the company's 2Q09 profits is probably lower than what was recorded in 1Q09.