Gold price will likely record it's 3rd falling day in a roll as stock markets rally. Currently trading at 910.7, the precious metal for April delivery may test recent low at 891.1 if funds continue to move from safe-haven assets to the equity market. Assets in the SPDR Gold Trust stayed unchanged at 1069.05 metric tons yesterday after climbing for four straight days.

In Asia, stocks rose as driven by the Bank of Japan's plan to increase bond purchase. The MSCI Asia Pacific Index gained 0.8% while Japan's Nikkei 225 Stock Average added 0.3%. After the meeting, the BOJ said that it will increase the purchase of government bonds to 1.8 trillion from the current 1.4 trillion yen. The news cheered investors and they saw the central bank try to do something to revive the economy.

In Europe, shares extend recent rises amid speculations that the FOMC will announce more growth-boosting plans. Both Germany's DAX and France's CAC 40 gain around 1% on Wednesday as driven by banking stocks. However, UK's FTSE 100 loses ground on poor employment data for February. The number of people claiming jobless benefit surged by 138.4K, the biggest increase since 1971, in February. At the same time, unemployment rate rose to 6.5% in the 3 month to January. This brought the number of unemployed to 2.029M, the highest level since 1997.

WTI crude oil price remains strong at 48/49 ahead of US inventory report. Although the market anticipated another week of oil build, price has stayed firm as investors are seeing impacts of OPEC's previous cuts. Yesterday, Algerian Oil Minister Chakib Khelil said OPEC's compliance with quotas will improve to about 95% from the current 80% by the time the group meets in May.

Analysts widely anticipated a 1.5 mmb increase in crude stockpile. On Tuesday, the API reported a large build of 4.66 mmb in crude inventory as decline in oil import was more than offset by lower refinery runs. Premised on this, we expect inventory at Cushing, Oklahoma, may have surged after 4 consecutive weeks of decline due to maintenance of refinery plants.

Weekly change in inventory as of 13/03/09ActualMarket ExpectationPrevious
Crude oil+1.5 mmb+0.749 mmb
Gasoline-1.5 mmb-2.99 mmb
Distillate+1.0 mmb+2.11 mmb

Comparison between API and EIA reports:

API (Mar 13)
EIA (Mar 13)
Market expectation
Forecast (using API's inventory level)
Crude oil
+4.66 mmb+1.0 mmb350 mmb-1.34 mmb350 mmb
+0.38 mmb-0.1 mmb216.9 mmb+4.48 mmb217 mmb
+0.33 mmb+0.4 mmb144.3 mmb-1.4 mmb144 mmb