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Trend:

Rotterdam: $ 0 lower
Singapore: $ 2 higher
US Gulf: $ 1 higher

Mixed news on a slow oil-news day (Brent: $104.1)

Iraq has resumed oil exports through Turkey after fixing a pipeline hit by sabotage. Unless a major pipeline should halt operations this would have litte impact on oil prices.

The U.S. jobless claims, published on Friday, came out at 323,000 - more of less in line with expectation. The overall trend continues to show a recovering labor market. Just 12 months ago, an improving U.S. job market would have meant implicit higher oil prices (as demand would have been expected to pick up). While demand is still likely to pick up, the shale oil supply boom should be able to more than offset rising U.S. demand. We continuosly interpret the shale oil theme as able to prevent an oil price spike, not significantly lower prices.

Iran oil exports still at 1 mbpd

Reports that Iran continues to use "flexible strategies" to circumvent the sanctions imposed by US/EU circle the oil market. Islands close to Singapore are seemingly being used as storage facilities, and potentially oil could be shipped from there to Asia or other netimporters with a high demand for crude. Should this option somehow become targeted by sanctions, it would further increase the pressure on Iran, which has seen a drop in exports by more than 50% due to current sanctions. Roughly 1 mbpd is still hitting the global markets.

Recommendation

Due to increased geopolitical concerns, we expect oil prices to stay above $100. Furthermore, given the multiple factors; Break-even price of OPEC and shale oil extractions – the big divergence between equities and oil, we recommend consumers to secure hedges should it suit your budget.