Oil extended losses after a government report showed that U.S. crude inventories increased a second week.

Crude supplies rose 10.1 million barrels to 397.9 million in the week ended Jan. 16, according to the Energy Information Administration. A 2.7 million-barrel stockpile gain was projected in a Bloomberg survey of 10 analysts. Futures slipped earlier after the European Central Bank announced an expanded asset-purchase program, strengthening the U.S. dollar.

West Texas Intermediate crude for March delivery slipped $1.34, or 2.8 percent, to $46.44 a barrel at 11:01 a.m. on the New York Mercantile Exchange.

Brent for March settlement fell 84 cents to $48.19 a barrel on the London-based ICE Futures Europe exchange.

Gasoline supplies rose 588,000 barrels to 240.9 million. Inventories of distillate fuel declined 3.27 million to 136.6 million. U.S. crude production decreased 6,000 barrels a day to 9.19 million last week, said the EIA, the Energy Department's statistical arm. Refineries operated at 85.5 percent of their capacity, down from 91 percent the previous week.

ECB President Mario Draghi announced plans to buy 60 billion euros ($69 billion) a month of public and private debt until September 2016. The 19-nation shared currency slipped to an 11-year low against the dollar.

Brent crude and West Texas Intermediate continue to rebound from 5-1/2 year lows ahead of ECB bond buying decision. Brent Crude added +0.78%, currently trading at USD49.41 a barrel, still below the important USD50 level. West Texas Intermediate rose by +0.15% currently quoted at USD47.85 amid a rising U.S. dollar that makes the dollar-priced commodity expensive for holders of other currencies. At the world economic forum in Davos Eni CEO Claudio Descalzi said that oil prices could spike to USD200 a barrel as the oil industry would cut investments as a consequence of falling prices - leading to longer term shortages in four to five years and called for a cut in output rates by the OPEC, who is responsible for 40% of worldwide oil production. OPEC secretary general Abdullah al-Badri said higher-cost producers should cut production first, reaffirming that the OPEC won't move first as the cartel fights for market share.

Oil prices fell by nearly 60 percent over the past six months, and both key brands of oil are currently trading below $ 50 a barrel as the supply of from the United States, Russia and Canada and other producers exceeded demand in a period of low global economic growth and the OPEC refusing to cut output rates to stabilize prices.

Gold prices declined today after trading in yesterday's session above USD1,300 for the first time in five months. After reaching USD1,305.10 yesterday the precious metal declined and continued to fall as market participants see less necessity for safe haven assets with the ECB launching a large scale economic stimulus program. According to insiders the ECB Executive Board has proposed to purchase 50 billion euros in assets a month through the end of 2016 not starting before the 1^st of March.

The ECB's policy meeting is scheduled for today, the press conference will start at 13:30 GMT.

A broadly stronger dollar also weighed on the precious metal as it makes dollar-nominated gold more expensive to buy for holders of other currencies and investors took profit after the recent rally of gold.

Although the precious metal is weighed down by the ECB, investors' concerns over the outcome and the consequences of the Greek elections on January 25^th are lending support to gold as the next Greek government will have to decide whether to extend the international bailout or not. The anti-austerity party Syriza leads in polls by almost 5%, adding to uncertainty on the markets.

The precious metal is currently quoted at USD1,286.30, -0,50% a troy ounce.

BLOOMBERG

Don't Worry About China Slowdown, Premier Li Tells Davos

China will avoid a hard landing and is focused on ensuring long-term medium-to-fast growth, Premier Li Keqiang told global leaders in Davos.

While the economy will still face large downward pressures in 2015, China won't have systemic financial risks and will seek to improve the quality of growth to ensure an "appropriate" pace of expansion, Li said Wednesday in a speech at the World Economic Forum in the Swiss ski town.

A few hours earlier, the central bank governor said on a panel that a slower expansion is "good news" if it's more sustainable. The comments and the first reverse-repurchase agreements in a year on Thursday follow data this week showing 7.4 economic percent growth for 2014, the slowest in 24 years and the first failure to meet government targets this century.

Source: http://www.bloomberg.com/news/2015-01-21/don-t-worry-about-china-growth-slowdown-premier-li-tells-davos.html

REUTERS

D-Day for euro as market awaits ECB quantitative easing

(Reuters) - The euro held fast more than a cent above 11-year lows ahead of a European Central Bank policy meeting on Thursday widely expected to embark on the outright money-printing the bank has steadfastly avoided, in contrast to its peers.

Traders and strategists at the major banks say an extended monthly bond-buying program, outlined by Reuters and other news services on Wednesday, is fully priced-in to the euro.

That argues for a clearing out of many of the bets on the euro weakening against the dollar that have made money for investors over the past six months and the single currency rose almost a cent on Wednesday.

Source: http://www.reuters.com/article/2015/01/22/us-markets-forex-idUSKBN0KT2KA20150122

BLOOMBERG

IMF Says Gulf States Set to Swing Into Deficit as Oil Falls

The oil-rich nations of the Persian Gulf are set to post budget deficits this year after a plunge in crude prices, the International Monetary Fund said.

The six nations of the Gulf Cooperation Council will have a collective fiscal gap of 6.3 percent of gross domestic product, a swing of about 11 percentage points from last year's surplus, the IMF said in a report published in Washington on Wednesday. While many nations have enough savings to avoid steep cuts and "limit the drag on growth," they will need to adjust spending plans in the longer term, it said.

The IMF cut its 2015 growth forecast for the Middle East's oil exporters to 3 percent from the 3.9 percent it projected in October. It kept the prediction for the region's oil importers at 3.9 percent, saying that worse-than-expected demand in export markets in the Gulf and Europe will offset any benefits from cheaper energy.

Source: http://www.bloomberg.com/news/2015-01-21/imf-says-gulf-states-set-to-swing-into-deficit-as-oil-plunges.html

(raw materials / closing price /% change)

Light Crude 47.34 -0.92%

Gold 1,293.70 -0.04%