Some disappointing news dampened market confidence and pared gains made earlier in the day. It's reported that the EU group meeting will be replaced by a conference call as final details regarding the Greek bailout plan are not yet ready. Moreover, in the US, the less-than-expected growth in retail sales and weak auto sales damped market sentiment. Wall Street treaded water most of the day before recovering modestly in late session. In the commodity sector, crude oil benchmarks moved in opposite directions. WTI crude oil for March delivery initially soared to a 4-week high of 101.84 before settling at 100.74, largely flat from the previous close. The equivalent Brent crude contract climbed slightly higher and ended the day at 118.16.

Speculations of a disorderly default have increased as finance ministers replaced a Brussels meeting by a teleconference instead to discuss about the Greek bailout plan. According to Jean-Claude Juncker, the change was due to the situation that 'there weren't sufficient elements of consensus to be sure that a meeting would be successful'. He also noted he has not yet received the required political assurances from the leaders of the Greek coalition parties on the implementation of the program. It's reported by Reuters that Socialist leader George Papandreou has signed such an assurance while the New Democracy party leader Antonis Samaras has not.

The US dataflow has always been triggering fluctuation in the financial markets. Retail sales gained +0.4% m/m in January, up from +0.1% a month ago but missed consensus of +0.7%. Excluding auto, the figure climbed +0.7%, following a -0.2% drop in December. This was also higher market expectations of a +0.5% gain. A number of US data will be under the spotlight in the NY session today. The Empire State Manufacturing Index probably rose to 14.1 in February from 13.5 in the prior month. Industrial production might have expanded +0.6% n/n in January, up from +0.4% a month ago. The Fed will also release its minutes for the January meeting.

Ahead of the official oil inventory report by the DOE/EIA, the industry-sponsored API estimated that crude oil inventory soared +2.9 mmb in the week ended February 10. Gasoline inventory rose +1.81 mmb while distillate stock slipped -2.16 mmb.

Weekly change in inventory as of 10/02/11
Change
Consensus
Previous

Crude oil
 
+1.50 mmb
+0.30 mmb

Gasoline
 
+0.78 mmb
+1.63 mmb

Distillate
 
-2.16 mmb
+1.17 mmb

Comparison between API and EIA reports:

       

 
 
API (Feb 10)
 
 
EIA (Feb 10)
 

 
Actual
Inventory
Previous
 
Forecast (using API's inventory level)
Inventory

Crude oil
+2.90 mmb
334.93 mmb
-4.53 mmb
 
-1.42 mmb
335mmb

Gasoline
+1.81 mmb
230.71 mmb
+4.43 mmb
 
-1.04 mmb
231 mmb

Distillate
-2.16 mmb
142.08 mmb
+0.39 mmb
 
-4.50 mmb
142 mmb

       

API collects stockpile information on a voluntary basis from operators of refineries. Data from the API and DOE have moved in the same direction 71% of the time over the past 52 weeks

Source: Bloomberg, API, EIA