Oil rebounded from the biggest drop in a week amid signs that prices near a 5 1/2-year low are slowing drilling in the U.S.

Futures rose as much as 3 percent in New York and 2.9 percent in London. BHP Billiton Ltd., the largest overseas investor in U.S. shale, said it will cut the number of active drill rigs in the nation by almost 40 percent. The rapid decline in oil prices may deter investment in all types of energy needed to meet future demand, the head of the International Energy Agency said.

"The market is trying to stabilize," said Tariq Zahir, a New York-based commodity fund manager at Tyche Capital Advisors. "You are seeing the rig count coming down. Production will take some time to come off. The U.S. economy is looking pretty good and demand will pick up."

Oil has dropped more than 10 percent this year following a decline of almost 50 percent last year, the most since the 2008 financial crisis. The U.S. pumped crude at the fastest rate in more than three decades and the Organization of Petroleum Exporting Countries resisted calls to reduce supply.

West Texas Intermediate for March delivery gained $1.14, or 2.5 percent, to $47.61 a barrel at 10:08 a.m. on the New York Mercantile Exchange. The February contract expired Tuesday after falling $2.30 to $46.39. The volume of all futures was 1.6 percent below the 100-day average.

Brent for March settlement climbed $1.07, or 2.2 percent, to $49.06 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $1.43 to WTI.

OPEC secretary general Abdullah al-Badri said at the World Economic Forum in Davos on Wednesday that he believes oil prices will rebound "very soon".

He also defended OPEC's decision not to cut output in November. "It was a pure economic reason", al-Badri said.

Al-Badri noted that OPEC's policy was not directed at Russia, Iran or the United States.

Brent crude and West Texas Intermediate rebound from near 5-1/2 year lows on Wednesday after the price slump on Monday and Tuesday as slower drilling in the U.S. is visible. BHP Billiton announced to reduce the number of U.S. shale-rigs from 26 to 16. But a cut in growth forecast by the IMF and weaker data from China weigh on prices and keeps them near recent lows. China is the world second largest consumer of oil and has an important impact on demand. Markets look ahead to data on U.S. API Crude Oil Inventories due at 21:30 GMT. Today Iraqi Oil Minister Adel Abdul-Mahdi said that prices have probably reached their bottom. Brent Crude added +1.63%, currently trading at USD48.77 a barrel. West Texas Intermediate rose by +1.03% currently quoted at USD46.95.

Oil prices fell by nearly 60 percent over the past six months, and both the key brand of oil is currently trading below $ 50 a barrel as the supply of high quality light crude oil from the United States and Canada exceeded demand in a period of low global economic growth.

Gold prices rose today continuing the recent rally. Intraday the price of the precious metal traded above USD1,300 for the first time in five months. Demand for gold is driven by speculations on further stimulus measures by central bank as global growth is slowing according to the International Monetary Fund leading investors to buy the save-haven asset. The ECB's policy meeting is scheduled for tomorrow, January 22^nd. Upcoming Greek elections lend further support as the anti-austerity party Syriza is leading in polls adding to uncertainty. A broadly weaker dollar also helped the precious metal as it makes dollar-nominated gold cheaper to buy for holders of other currencies.

The precious metal is currently quoted at USD1,297.60, +0,36% a troy ounce.

BLOOMBERG

Is Dollar Next? Investors Reassess After Swiss Shock: Currencies

After Switzerland shocked markets by scrapping its currency cap, investors are beginning to ask whether a policy surprise may be lurking for the dollar, too.

Samson Capital Advisors LLC said the Swiss move, which sent the franc surging as much as 41 percent against the euro last week, was "a good reminder" of the risks of following the herd, just as speculators pushed bets on a dollar rally to a new high. A shock from the Federal Reserve, such as raising interest rates less quickly than investors expect, may derail the greenback after it advanced to the highest in a decade, State Street Global Advisors Inc. warned.

Source: http://www.bloomberg.com/news/2015-01-21/is-dollar-next-investors-reassess-after-swiss-shock-currencies.html

REUTERS

Brent crude oil rises above $48.50, but outlook remains weak

(Reuters) - Oil prices edged up on Wednesday in a further sign of support around current levels, but analysts said the outlook for the next six months remained bleak due to oversupply.

Oil fell as much as 5 percent on Tuesday after the International Monetary Fund cut its 2015 global economic forecast and key producer Iran hinted prices could drop to $25 a barrel without supportive OPEC action.

Prices stabilised on Wednesday, with traders pointing to buying this week whenever benchmark Brent crude LCOc1 dropped towards $48 a barrel.

Source: http://www.reuters.com/article/2015/01/21/us-markets-oil-idUSKBN0KU03F20150121

BLOOMBERG

Draghi Bond Buying More Welcome in East Europe Than Switzerland

Unlike in Switzerland, eastern Europe has reasons to cheer Mario Draghi's bond-buying push.

Policy makers from Poland to Hungary (HUCPIYY) met at a conference in Vienna on Tuesday, two days before the European Central Bank is due to discuss monetary stimulus that may trigger inflows into currencies such as the Swiss franc. For eastern Europe, the move may help keep deflation at bay and economic growth ticking over, trumping the risk of asset bubbles, bankers and analysts said.

ECB bond buying would "clearly be a positive," said Piroska Nagy, an economist at the London-based European Bank for Reconstruction and Development, which has invested to rebuild the region since communism fell. "Monetary easing can have a positive impact on the economies that are linked to the zone conducting this policy."

Source: http://www.bloomberg.com/news/2015-01-19/draghi-bond-buying-more-welcome-in-east-europe-than-switzerland.html

(raw materials / closing price /% change)

Light Crude 46.39 -4,72%

Gold 1,294.20 +1.35%