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Trend:

Rotterdam: $2 lower
Singapore: $4 higher
US Gulf: $1 lower

No important short-term news (Brent: $103.6)

For three years the global markets have been trapped in the cycle: bad macro numbers - increased expectations of QE - more QE - repeat. The subpar U.S. macro figures yesterday seemed to offset the hint dropped last week by Jon Hilsenrath that the markets should seriously reconsider QE as something that goes on forever..... While we do not see QE coming to end imminently, the FED statement on Wednesday (22 May) is likely to cause some stir. We expect the statement to throw a few ice cubes into the flaming QE-fire. A gradual rolling back of the money printing program would actually be a positive thing for the global financial outlook, as it would signal a U.S. economy strong enough to stand on its own two feet.

Next week might provide opportunities to enter hedges at favorable levels. We continue to advise consumers to enter hedges around current levels, as break-even prices of OPEC have increased and continued geopolitical unrest in oil producing countries.

Recommendation:

Due to increased geopolitical concerns, we expect oil prices to stay above $100 on average. 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.