Natural gas rose 5.2% to close at 3.995 Thursday after plummeting to 6-year low at 3.759 earlier. According to the report by US Energy Department, industrial gas use, which accounts for 29% of natural gas consumption, will drop 6% to 17.1 bcf per day in 2009.

The benchmark then generated some buying interest as it was oversold as well as stimulated by a better-than-expected inventory report. Storage was reduced 112 bcf for the week ended Mar 6, compared with consensus of 103 bcf draw and the biggest drop in a month, to 1681 bcf. However, inventory was still 13% above 5-year average.

Natural gas price has tumbled 29% year-to-date and over 70% from 13.694 peak in July 2008. The collapse in price discourages investment and the number of natural gas rigs in the US dropped to 916 as of last Friday. While we believe supply contraction will eventually cause tightening in gas market and lend support price, the rapid deterioration in global economy and shrinkage in business activities greatly increase the uncertainty on when it will be achieved.

Looking ahead, outlook for natural gas price was more bearish than bullish as corporations are reducing jobs and closing plants amid global recession.

Despite the sideways consolidation, WTI crude oil continues to trade above 46.5 in European morning as the majority of analysts bet for another round of production cut by OPEC on Sunday. Even though the cut may materialize, whether it's sufficient to curb price decline is uncertain. IEA has just revised down its 2009 estimate on oil demand for the 7th month. The agency forecast oil demand will drop 1.5% yoy to 84.4M bpd, 0.27M bpd lower than the previous projection.

Gold price eases to 921 as stock markets advance. In Asia, the MSCI Asia Pacific Index gained 3.5% and Japan's Nikkei Stock Average climbed 5.2% as both china and Japan said they are ready for further stimulus. Prime Minister Taro Aso in Japan pledged a 3rd spending plan to revive economy while Finance Minister Kaoru Yosano announced to inject 121B yen to 3 regional banks. In Europe, UK's FTSE 100 Index gained 1.5% as driven banks and commodity companies. In Germany, the DAX Index added 1.7%. The gauge is expected to record the largest weekly gain this week.

We remain bullish on gold in long term. In fact, we see investment demand returned. Bullion holdings the SPDR Gold Trust, surged to a record of 1041.53 metric tons yesterday. The holding has now surpassed the gold reserve held by SNB which is 1040.1 metric tons.