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Crude Oil stabilized below US$70 bbl as mixed economic data failed to provide momentum in either direction. Light, sweet crude for October delivery ended 9 cents lower at US$67.96 bbl on the New York Mercantile Exchange. The contract earlier rose to an intra-day high of US$69.40 bbl on US stock gains and a weaker US$. Wall Street was driven up by upbeat retail sales after a four day losing streak for the Standard & Poor’s 500 Index. In London, Brent Crude for October delivery fell 54 cents to settle at US$67.12 bbl on the ICE Futures exchange.

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Crude Oil rose about US$1 toward US$74bbl to settle at a 10 month high Friday as data in the United States promised economic recovery and a revival in energy demand. US Crude for October delivery settled up 98 cents at US$73.89bbl, the highest settle since October 20. London Brent crude for October settled up 86 cents at US$74.19bbl Crude Oil gained US$6.38 on the week, about 10%, from the US$67.51 settle on August 14. The US$ was down against the Euro, helping to support commodity prices, with investors showing some appetite for risk.

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Crude Oil rose to a six-month high above US$66 per barrel on Friday, marking its largest monthly percentage gain in more than a decade, after U.S., Japanese and Indian data suggested the economic downturn may be easing. Crude Oil prices jumped around 30 percent this month, the largest monthly rise since March 1999, buoyed by expectations of a global economic recovery later this year, which helped push stock markets higher. US Crude Oil for July delivery settled up US$1.23 at US$66.31, its highest settlement since November 4, after earlier hitting US$66.47, the highest intraday trade since November 5.London Brent crude settled up US$1.13 at US$65.52, its highest settle since November 4. The US$ hit a five-month low against a basket of other currencies. A weak US$ makes Crude Oil cheaper for holders of other currencies and tends to support prices

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Since the World’s credit markets seized up on September 8, 2009 many corporations are either cutting costs, waiting for government bailout money, or preparing for bankruptcy, as banks are reluctant to lend to all but the most credit worthy and then at unconventionally high interest rates.

In the center of the storm lies the US, UK and EU financial industry where it all started.
The US Federal Deposit Insurance Corporation said last week that the nation’s banks and thrifts lost US$32.1B in the Q-4 Y 2008, the first quarterly deficit in 18 yrs, compared with the US$575MM profit in Q-4 Y 2007. The industry’s net income for Y 2008 plunged from US$16.1B to US$10.2 B for the period.

In the US eighteen federally insured banks have failed so far this year. Last year the number was 25, more than the total number of the previous five years, and up from only three in 2007.
Shares of Citigroup Inc., once the most powerful U.S. bank, have fallen below 1 dollar this month. Pummeled by the financial crisis, the group has lost more than 98 % of its value from its peak in October 2007, and is down more than 95 % from a year ago.

The American International Group (AIG), covered almost daily in www.stockpreacher.com’s Stock Talk, reported this month that it lost US$ 61.7B in Q-4 Y 2009, the largest corporate loss in history. AIG has benefited since from more than US$170B in federal rescue funds with more likely needed and to come.

HSBC Holdings PLC, the largest bank in Europe, early this month reported a 70% drop in its Y 2008 profit and said it would cut 6,100 jobs as it closes its consumer loan business in the United States. It also announced that it would cut its dividend and not pay bonuses to top executives.

In the US, the DJIA sank below 6,800 on March 3, its lowest close since May 1997, losing more than 50% from its highest level in October 2007. Since then the S&P 500 has staged a 19.8% rally off of its lows in the same frame.

On March 23 when the markets were surprised by the US government’s latest plan on clearing bad bank assets and a larger-than-expected rise in existing home sales, the three main indexes all surged more than 6.5% on the day.

Some Economists suggest that financial crisis has yet to bottom out, and the real economy continues to slip as the global economic situation deteriorates.

Therefore, stimulus spending, market confidence, financial regulation and free trade will be key issues at the G20 summit of the World’s leading developing and developed economies next week in London.

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What the Financial Times of London described as “combative” US President Barack Obama warned last Saturday he was bracing for a fight against powerful lobbyists and special interests who sought to pick apart the US$3,550B (or US$3.55T) budget he wants to advance his agenda of reform.

Mr. Obama’s spending blueprint, with its massive US$1,170B (or US$1.17T) deficit and tax hikes on the wealthy, seeks to squeeze billions of US4s in savings out of current spending through competitive bidding among health insurers and ending subsidies and tax breaks for banks, agribusiness and oil companies. ”These steps won’t sit well with the special interests and lobbyists who are invested in the old way of doing business,” the president said in his weekly radio address.”I know they’re gearing up for a fight as we speak,” he said. ”My message to them is this: So am I.”

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Investors are buying record amounts of Gold bars and coins, shunning risky assets for the relative safety of bullion amid renewed fears about the health of the global financial system. The US Mint sold 92,000 ozs of its popular American Eagle coin in January, almost four times that which it sold a year ago and more than it shipped during the whole of the first half of 2007. Other countries’ mints have also reported strong sales. “Large purchases of coins are perhaps the ultimate sign of safe-haven gold buying,” said John Reade, a precious metals strategist at UBS.

Inflows into Gold-backed exchange traded funds also surged in January 2009, pushing their bullion holdings to an all-time high of 1,317 tonnes. Last month’s flows of 105 tonnes were above September’s previous record of 104 tonnes, and absorbed about half the world’s Gold mine output for January, said Barclays Capital. “We estimate that investment demand [into Gold] could double in 2009 compared to 2007,” said Mr. Reade. “Purchases of physical Gold have jumped over the past six months as investors’ fears about the current financial crisis … have intensified.” The move into Gold is being driven by the very rich, with bankers saying that some clients are hoarding Gold in their vaults. UBS and Goldman Sachs said last week that investor hoarding would drive prices back above US $1,000 oz.

Last Monday Gold was trading at US$892 oz. and closed last Friday at US$942.20 + US$ 50.20 (5.6%) on the week. Traders and analysts said jewelry demand, historically the backbone of gold consumption, had collapsed under the weight of the high prices. Sharp falls in demand in the key markets of India, Turkey and the Middle East have capped the potential of any price rally. But the lack of jewelers demand has not discouraged investors. Jonathan Spall, director of commodities at Barclays Capital in London, said: “We have seen more new enquiries about investing in gold so far this year than during the whole 2008.”

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