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Trends

Rotterdam: $ 5 higher
Singapore: $ 5 higher
US Gulf: $ 1 higher

Hugo Chavez dies (Brent: $111.7)

Late President Chavez of Venezuela has died after fighting cancer for several years. For now Vice President Nicolas Maduro will be in charge until elections have been held. According to domestic regulations, elections must be held within 30 days. Venezuela has a daily oil production of approximately 2.5 mbpd, and thanks to the Orinoco Oil Field holds the largest oil reserves in the world - ahead of Saudi Arabia. Production in the Orinoco Belt is estimated to begin during 2013. Any messy outcome of the election would have a direct impact on oil prices, but currently Vice President Maduro looks set to win and is not expected to significantly rock the boat of the oil market.

Financials updates:

Dow Jones set new record high. As equities correlates with oil, this had a bullish effect on prices.
U.S. macro figures (ISM non-Manufacturing) surprise positively (56 vs. 55.2 expected). Anything above 50 signals positive growth.
Private U.S. unemployment figures due today at 14.30 CET.
ECB and Bank of England (BoE) rate decision and press meeting due tomorrow.

Recommendation

Fundamentals are still pointing upwards for prices, and issues regarding the nuclear program in Iran will be around for quite some time. Despite the agreed meetings between P5+1 and Iran an actual solution is still far far and away. Any setbacks from current levels should be used to establish party hedges. On average prices are more likely to trade between 110-120 for the rest of the year than 100-110.