Crude oil fell for the first time in 3 days as oil inventory rose more than expected and utilization rate dropped to the lowest level since 2008. Stockpiles for oil products dipped but demand remained dismal.WTI crude oil price slid -0.32% to 76.98. Heating oil fell -0.6% to 2.0194 while gasoline rose for a 3rd day to 2.0362, up +0.9%.

The -2.32 mmb increase in crude oil inventory mainly came from Gulf Coast. After fog and oil spill issues cleared up, imports into the region rebounded strongly and inventory surged +5 mmb last week. However, the builds were offset by drops at Cushing, Oklahoma and Midwest.

Gasoline inventory drew -1.31 mmb with weekly demand flat at 8.613M bpd. However, it's far below 9.015M bpd the same period last year. Distillate inventory fell -0.95 mmb but demand dropped -1.7% to 3.659M bpd from the prior week. The demand level was -13.3% lower than a year ago.

Energy prices continue to edge lower in Asian session today as disappointing economic data trigger concerns over slowdown in recovery.

Australia's retail sales contracted -0.7% mom in December, compared with consensus of +0.3%, following an increase of +1.5% a month ago. Reduction in consumer spending reflects the impact of the RBA's 3 consecutive rate hike late last year. Increase in interest rates raises the cost of mortgage payment by homeowners and hence restraining expenditure elsewhere. The RBA announced to keep its policy rate unchanged in February as the central bank would like to gauge the impacts of recent hikes.

In New Zealand, unemployment rate soared to a 10-year high at 7.3% in 4Q09 from 6.5% in the prior quarter. The market had anticipated modest pickup to 6.8%. This will probably delay the RBNZ's tightening schedule.

Rallies in precious metals also stalled as the dollar strengthened. The benchmark contract for gold closed at 1112 after rising to 1126.4. PGMs also plunged. Platinum closed flat but palladium slid -1.8% to 436.8. We expect PGMs will outperform gold and silver this year as driven by tight fundamentals and robust ETF demands.

The BOE and ECB will announce their monetary policy later today. While both central banks will decide to leave interest rates unchanged, the BOE will probably announce a pause in the 200b pound asset purchase program. For the ECB, President Trichet is expected to reiterate current interest rates are at appropriate levels and risks of growth and inflation to both sides are balanced. The ECB is unlikely to unwind its monetary policies other than the non-standard ones.