Crude oil prices remained firm in European session on worries over supply disruption in the North Sea. Although market concerns eased last Friday after news that the White House would consider releasing strategic petroleum reserve (SPR) to meet oil demand, the International Energy Agency stated that there was "no reason" for the release. The front month contract for WTI crude oil resumed the recent rally and climbed higher to 96.53 while the Brent crude contract attempted to rise above 115. Gold gained for the 5th consecutive day on hopes of more stimuli from major central banks.

Last week, the White House signaled that that the US government is considering release of oil from SPR. Spokesman Josh Earnest stated that the SPR release is "an option that is on the table" though no decision was made yet. Such option, however, met criticism from the IEA which said that there was "no reason" for the release as "the market is sufficiently supplied". Earlier this month, the IEA reduced its estimate of 2012 world consumption by -250K bpd to 89.6M bpd and the 2013 estimate by -400K bpd to 90.5M bpd. The downward revisions were driven by the downward revisions in global GDP growth forecast (down from +3.6% to +3.8% for 2013). The US SPR, established after the oil crisis in 1973/74, currently holds up to 727 mmb of crude oil at 4 sites. It is originally planned to be tapped during extreme oil supply shortage.

In China the central bank injected a total of RMB 220B through reverse repos to the public (RMB 150B using 7-day contracts at 3.4% and a further RMB70B billion using14-day contracts at 3.6%). This is part of the government's measures to stimulate the economy, preventing it from slowing further. The message sent from this move is mixed. While the PBOC increased the amount of the repos, the yields were also higher. The injection would lower speculations of further cuts in required reserve ratio.

Gold strengthened for the 5th day while silver gained for the second consecutive day. Note that the latter has risen to the highest level in 2 months, signaling the white's metal's safe-haven characteristic has overshadowed its industrial metal characteristic. Precious metal firmed, probably because investors were anticipating some dovish comments from the FOMC minutes due tomorrow.