Commodity prices stabilize after the severe selloffs last Friday. G-7 financial ministers' pledge to boost economic growth through stimulus measures might have temporarily lifted market sentiment. WTI crude oil rebounds to 71.70 in Asian session. The benchmark contract plunged to as low as 69.5 before closing at 71.19 last Friday.

The Group of Seven (G-7) finance ministers and central bank governors met over the weekend in Canada's remote north. Policymakers pledged to keep economic stimulus until recovery is self-sustainable. As stated in the chairman's summary, 'we do not have a firmly established recovery yet but there are good signs. We need to continue to deliver the stimulus to which we are mutually committed and begin to look ahead to exit strategies and move to a more sustainable fiscal track, consistent with continued recovery'.

Concerning sovereign crisis in Europe, the G-7 peers stressed that they would make sure Greece adheres to its deficit-reduction plan. However, the assurance will only have temporary comfort, if any, to the market as the problem is so serious that it's spreading from Greece to nearby countries. Moreover, the deficit problem does not occur only in the European, the US is set to reach a budget deficit of $1.6 trillion this year.

News supporting oil price also includes militant attacks in Nigeria. On Sunday, a militant group in Niger Delta region announced it 'disabled' a trunk oil pipeline run by Royal Dutch Shell. We believe more attacks will be seen in the region as the MEND (the largest armed group in the region) ended the indefinite ceasefire on January 30 as the government has been nonresponsive in discussions about giving oil control to local people.

Although euro continues sliding against the dollar, gold, moving in tandem with others in the commodity complex, rebounds to 1067 after Friday's slump to 1044.5. Others in the precious metal complex also grind higher with silver rising +2.2%, platinum by +0.6% and palladium by +1.2%.

Commitments of Traders:

Crude Oil: Net speculative long positions slid more than -10K to 86Kcontracts in the week ended February. While US' bank proposal to curb risk-taking increased risk aversion has far from being resolved, risk appetite shrank further amid sovereign crisis in the Eurozone. Traders liquidated long positions in commodities while short positions surged.

Natural Gas: Net speculative short positions declined further to 159.4K contracts. Both longs and shorts were dropping but the pace of decline in long positions is slower, contributing to the reduction in net shorts.

Gold: Net speculative long positions slid for the 3rd consecutive week to 210.2K contracts. USD rallied against major currencies amid concerns on sovereign default risk. Due to traditional inverse correlation between gold and USD, pressure on gold as the dollar strengthened is inevitable

Silver: Net speculative long positions in silver dipped further to 30.9K, the lowest level in 5 months, last week. Obama's bank proposal and Greece's deficit problem triggered selloffs in risky assets. Moreover, fears of tightening in China weighed on metals with industrial uses.

Platinum: Net longs rebounded to 19K contracts after plunging for 3 weeks. PGM prices staged a rebound during the reporting (ended February 2). We expect sharp decline in net speculative long positions in coming weeks as credit crisis in peripheral European nations hurt sentiment and triggered selloffs in risky assets.