There are still no signs of a downturn in global economic activity, suggesting that the fundamental backdrop for most commodities, including crude, remains favorable. We'll see if this week's U.S. numbers change any of that.

Markets are becoming increasingly uneasy about the state of affairs, and are realizing that things in the Gulf are far messier than the initial assessments suggested.

The situation, therefore, still remains serious, with the next few weeks proving pivotal. We still think, however, that an eventual compromise will be reached, as both sides will be hard pressed to carry through with their threats.

Sometimes one comes across an especially odd trading day when nothing much makes sense. Yesterday's session was a case in point, with the action in the natural gas complex being particularly puzzling.

Although many polls show that U.S. consumers are intent on altering their behavior (i.e., driving less), we still have not seen significant structural shifts in behavior.

Commodities seem to be a rather popular alternative (to bonds, equities and the dollar) for funds searching for a trend.