Crude oil price for October delivery tries to recapture the 73 level after pulling back to around 72 earlier today. While the market remains thrilled by oil's +8% rally in the previous 2 days after huge decline in crude stockpiles, we advise a closer look at the selloff earlier in the week. It indicated that China's impact is not only on industrial metals, but also on energy market. More importantly, the impact is growing bigger and bigger.

According to the National Bureau of Statistics in China, crude oil production was 109.6M metric tons from January to July 2009, down -0.9% from the same period last year. While this decline looks insignificantly, knowing the fact that China has become net importer of oil since mid-90s and the amount of imports has been risen in a dramatic pace should lead investors to pay extra attention to the domestic production outlook on this world's third largest economy.

In an article in June, we have shown how national oil companies in China engage aggressively in M&A with foreign companies in order to secure oil supplies. At the same time, the China government has been pursuing the 'self reliance, self sufficiency' model for the petroleum industry. However, the preliminary trend suggests that China will still need to rely on foreign oil.

Platinum price retreats in European morning, in concert with the soft tone in others in the precious metal. We believe the white noble metal will likely consolidate in the coming week. The US Government announced that the 'cash for clunkers' vehicle program will end next Monday. This is a bad news for platinum price as recent pick-up is auto sales was mainly driven by this rebate program. It's uncertain if the improvement will persist after the program. About 50% of platinum and palladium use is for auto-catalysts. Demand for vehicles has direct impact on the demand for PGMs.

At the same time, potential production suspension in South African mines may lend some support to platinum price. News said that the National Union of Mineworkers (NUM) may start a strike next week if they cannot reach an agreement with Impala Platinum (the world's second largest platinum producer) regarding pay rise.

Gold price trades within a narrow range around 940 in European morning. The yellow metal will likely record the second consecutive weekly decline as capital outflows have seen in both investment and physical demand. Moreover, overall tone remains firm - while failed to rise strongly, every decline looked short-lived. We believe the situation will persist in the coming week. Thus, gold's movement will not have significant change in the near term.