The inflated crude prices observed as of late appear to be related to the ongoing action of the U. S. government to stimulate the American economy. Government activity last week to purchase up to $750 billion of mortgage-backed securities and subsequently announced plans to purchase an additional $300 billion in U.S. Treasury securities during the next 6 months all served to fuel expectations that an economic recovery might occur sooner than later, effectively buoying equity markets and creating at the same time a weaker U.S. dollar. These actions caused investors to switch over to commodities in order to take advantage of more cheaply priced commodity unit values and to seek a hedge against inflation. The result has been higher priced crude futures. Refined product prices as well have increased over the period. The cost of gasoline typically increase in the spring as refineries shut down for maintenance and gear up for the production of more expensive summer grade gasoline. It appears that this year maintenance activities have started earlier due to reduced demand and related reduced production activity. Gasoline prices have also been impacted in recent days by a shortage of imported blended stock utilized in the preparation of more complicated summer grade gasoline, hence while raw gasoline inventories have been more than sufficient, finishing components some of which are imported from Europe have been in short supply. The issue appears to be more one of timing than of a global shortage of supply with shipments currently en route to New York Harbour. A major market correction occurred on Monday, however, as the quarterly losses of a number of U.S. companies combined with concern over the fate of the bail-out plans for GM and Chrysler impacted domestic financial and commodity markets, significantly lowering the trading prices of both crude and refined products.

• Japan reported last week that February exports plunged an unprecedented 49.4% representing the most severe decline since the world's second largest economy began compiling comparable data in 1980.
• The U.S. Commerce Department reported on Wednesday that durable goods orders increased 3.4% last month, much better than the 2% fall economists expected and after a record 6 straight declines. It represented the first advance since July and the strongest one month gain in 14 months. The strength was led by a surge in orders for military aircraft and parts but demand for machinery, computers and fabricated metal products also rose.
• The Commerce Dept. also reported that new home sales rebounded unexpectedly last month though still the second-worst on record and well below last year's levels. Sales rose 4.7% in February to a seasonally adjusted annual rate of 337,000.