Crude oil price pulls back in European session as traders take profits from last week's rally. We have a light economic calendar today and the market is only awaiting Fed's Yellen to speak on US economy later today. Oil price will remain supported by bullish market sentiment.

Time-spreads for WTI crude oil strengthened last week as both the US and Japan reported robust economic data, signaling recovery in the 2 largest economies in the world. In the US, industrial production expanded +0.9% m/min January, exceeded market expectation of +0.8% and December's +0.6%. Compared with a year ago, output grew +0.9%, the first positive reading since March 2008. Capacity utilization also rose to 72.6%, the highest level in more than a year. In Japan, GDP expanded +4.6% q/q in 4Q09 in annualized rate as exports were strong.

Production disruption in the North Sea, strikes in France and geopolitical tensions between Iran and western countries also boosted price.

In markets which are sentiment-driven, it's normal to see oil and equities moving in tandem. The MSCI Asia Pacific Index rose +2.5%, the biggest gain since November 30. Other regional indices such as Japan's Nikkei 225 Stock Average and Hong Kong's Hang Seng Index also added more than +2% during the day. However, in European session, stocks pare gains last week with UK's FTSE 100,Germany's DAX and CAC 40 all losing grounds.

Profit-taking is also seen in gold as the front-month contract surging to 1131.5, the highest level since January 20. Although the rally is pause, near-term outlook in USD remains firm.

Economic data we should pay attention this week include US consumer confidence for February (Tue), new home sales for January (Wed), Fed Chairman's semi-annual monetary policy testimony (Wed), durable goods orders for January (Thu), Japan's industrial production for January (Thu) and UK's 4Q09 GDP (Fri).