Crude Oil – Crude had a choppy week, falling 2 percent on Monday and surging 3 percent Wednesday. Traders tried to balance US economic data hinting at an outlook for slower energy demand, with data showing actual drops in domestic crude stockpiles, which was bullish for oil. For the week, oil settled marginally higher. But for the month to date, it was down 12.4 percent due to a series of sharper selloffs seen in the two weeks of May. US crude oil and gasoline stocks were little changed last week and distillates fell, as oil imports decreased and refinery utilisation increased, according to a weekly report from the Energy Information Administration on Wednesday. Domestic crude declined 15,000 barrels to 370.3 million barrels in the week to May 13, the report showed, versus expectations for a 1 million barrel build in a poll of analysts. Inventories of gasoline rose 119,000 barrels to 205.9 million barrels. That compared with expectations for an 800,000-barrel build. Distillates fell 1.16 million barrels to 143.1 million barrels. Analysts had forecast a 700,000-barrel build. Concerned that high oil prices would dent the fragile global economic recovery, the Paris-based International Energy Agency urged oil producers to boost supply to cut fuel costs. IEA, a watchdog for 28 industrialised nations, suggested its members could release emergency stockpiles if OPEC failed to act, although US officials played down prospects for using the Strategic Petroleum Reserve to tamp down prices. The IEA statement, issued after its governing board met, was an unusual comment on producer policies, analysts said. The statement came ahead of OPEC's next policy meeting on June 8. The 12-member Organisation of the Petroleum Exporting Countries maintains that world oil supplies are adequate. Natural Gas – US natural gas rebounded midday Friday after sliding early to a five-week low, backed by technical buying after Thursday's sharp sell-off despite moderate US weather forecasts for next week and comfortable supplies. The US Energy Information Administration report showed total domestic gas inventories rose last week by 92 billion cubic feet to 1.919 trillion cubic feet. Traders and analysts had expected a 90 bcf build. Most traders saw the weekly build as bearish, noting it also exceeded the year-ago gain of 78 bcf and the five-year average increase for that week of 91 bcf. The build narrowed the inventory shortfall relative to last year by 14 bcf to 235 bcf, or 11 percent, and left stocks 36 bcf, or nearly 2 percent, below the five-year average. Many traders expect the storage gap compared to last year and the five-year average to shrink in coming weeks, as nuclear units return to service after planned spring maintenance, freeing more gas supply to pump into inventory. The EIA expects storage injections this stock-building season to total 2.29 tcf, the largest April-through-October build since 2003. That would drive domestic inventories to an all-time high near 3.87 tcf by next winter. Early injection estimates for this week's EIA report range from 88 bcf to 101 bcf versus a year-ago gain of 100 bcf and a five-year average increase for that week of 95 bcf. If weekly stock builds through October match the five-year average pace, inventories will begin next heating season with about 3.567 tcf in the ground, about 7 percent below last November's record of 3.84 tcf but about average for that time. FOREX Forex – The dollar slid last week as weak US economic data affirmed expectations the Federal Reserve will keep monetary policy ultra-loose for a while, keeping interest rates for the greenback very low compared with higher yielding currencies. The Fed is widely expected to refrain from raising rates this year, and if economic data continues to disappoint it could push out Fed action until well into 2012 or perhaps even later. Data showing a slowdown in manufacturing growth in the US Mid-Atlantic region and an unexpected dip in existing home sales in April triggered dollar selling and added to growing signs that US economic prospects were far from upbeat. Thursday's reports suggested growth was being hampered by a combination of bad weather at home and supply disruptions caused by the March earthquake in Japan, but analysts said the economy should regain momentum by the second half of the year. First-time claims for state unemployment benefits fell 29,000 to 409,000 last week, the Labour Department said. The bigger-than-expected drop eased fears that a large increase last month reflected a fundamental deterioration in the jobs market. In a separate report, the Philadelphia Federal Reserve Bank said its business activity index, a gauge of factory activity in the Mid-Atlantic region, slumped to a seven-month low. Some global central banks have already embarked on a path of monetary tightening, making their assets more appealing and lifting their currencies. The European Central Bank last month raised rates for the first time since July 2008. The euro has fallen in recent weeks after hitting a 17-month peak near $1.4940 in early May on expectations of a less aggressive ECB and concerns about debt in euro zone peripheral nations. Traders said major central banks have been alternately buying the euro on dips and selling it on any modest rally, suggesting the single euro zone currency will trade within a tight range until the European Union and International Monetary Fund complete a full analysis of Greece's debt. That analysis is due sometime in late May or early June and should shed light on whether Greece will restructure its massive liabilities. Debt restructuring is viewed as negative for the euro as it could prompt a flight away from euro zone bonds and damage the European Union's credibility after it went all-out to bail out Greece. INDICES Indices – Discouraging US housing and factory data weighed on markets on Thursday, while a lacklustre day on Wall Street was overshadowed by the doubling of professional networking company LinkedIn's share price in its market debut. A drop in weekly claims for unemployment aid suggested the US labour market was on track for recovery. But regional factory activity grew much more slowly than expected in May and home re-sales fell in April. Estimates for second-quarter US economic growth are currently ranging between a 3 percent and a 3.5 percent annual pace, but some analysts have started trimming forecasts as the impact of the supply chain disruptions becomes more evident. The economy grew at a 1.8 percent rate in the first three months of this year after a 3.1 percent clip in the fourth quarter of last year. Although some of the factors hindering growth may prove temporary, housing will remain a headache. Sales of previously owned homes fell 0.8 percent last month to an annual rate of 5.05 million units, the National Association of Realtors said. Housing is buckling under the weight of foreclosed properties, which are depressing prices. The data suggested the Fed, the US central bank, will be in no hurry to shift from its ultra-easy monetary policy stance. Investors on Wall Street shrugged off the weak housing and manufacturing data, focusing instead on the drop in claims. While the initial claims decline was more than economists' expectations for a fall to 420,000, they remained anchored above the 400,000 level that is normally associated with stable job growth for a sixth straight week. COMMODITIES Commodities rebounded on Friday, with oil rising 1 percent on book squaring at the end of a volatile week, and metals and most agricultural markets posted gains too. The rebound came even as the dollar strengthened due to the euro zone’s fiscal woes. Corn, copper and gold were among other major gainers. Corn jumped to its highest level since April 27 on forecasts for more wet weather and flooding in the US Midwest Corn Belt. Corn's benchmark contract, traded in Chicago, settled up 1.5 percent. For the week, the grain was up 11.5 percent. Wheat settled down 0.7 percent for the session, but showed a gain of 10.5 percent for the week. US copper closed up about 1.5 percent for the day and just over 3 percent for the week. Gold rose 1.5 percent on Friday, its biggest daily gain in two weeks, on safe-haven buying as investors fretted about euro zone debt after Fitch cut Greece's credit ratings. Bullion fell early in the session before turning higher after Fitch downgraded Greece's rating and as the International Monetary Fund urged Europe to agree to more comprehensive measures to tackle the debt crisis. Gold was up 1.5 percent for the week. The metal is still 4 percent lower after rallying to a lifetime high near $1,575 an ounce in early May. Silver was up 0.6 percent at $35.16, but remained down 30 percent from the record $49.51 hit on April 28. Bullion has dropped three out of the last four sessions on weak US housing and manufacturing data and uncertainty about the end of the Federal Reserve's bond-buying program.

Source