Crude oil trades move within a narrow range of 78.5 and 79.5 Tuesday. Although market sentiment has recovered from Friday, investors hesitate to buy oil at price above 80. Stock markets advance for another day while USD's outlook remains weak.

The International Energy Agency (IEA) anticipates oil demand will rise +1% on annual basis to 105M bpd by 2030 from 85M bpd in 2008 and all the growth comes from non-OECD countries. The figure was below last year's projection of 106M bpd.

According to the agency, 'the global financial crisis and ensuing recession have had a dramatic impact on the outlook for energy markets, particularly in the next few years. World energy demand in aggregate has already plunged with the economic contraction; how quickly it rebounds depends largely on how quickly the global economy recovers'.

With a new international climate policy agreement, energy needs to be used more efficiently and the carbon content of the energy we consume must be reduced, by switching to low- or zero-carbon sources. This will also slow down the growth of long-term crude oil demand.

However, this does not mean that oil supply will be at surplus. In fact, the IEA said that recession has also caused delays and cancellations of many oil projects and investments. This should result in net shortage in oil and rise in oil price in the long-term.

Gold price declines for the first time in 3 days as investors take profits after the yellow metal surged above 1110. Currently trading at 1010, the December contract for gold may drop further to 1070/80 level before resumption of long-term uptrend.

Temporary rebound in USD also drags gold price lower. However, any rebound should prove to be short-lived as interest-rate differential and risk of reserve diversification continue to weigh on USD. Therefore, we believe gold should be able to rally higher.

Stock markets rose in Asia as China reported that auto sales rose +45.2% to 8.19M for the first 10 months in 2009. Moreover, strong trade data were also reported in Taiwan and Philippines. The MSCI Asia Pacific Index rose +0.4%. Japan's Nikkei 225 Stock Average rose +0.6% to 9871 while Taiwan's TSEC weighted Index added +0.8% to 7593. In Europe, UK's FTSE 100 Index and Germany's DAX Index gain +0.2% while France's CAC Index changes little.