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Trend:

Rotterdam: $ 2 higher
Singapore: $ 3 higher
US Gulf: $ 0 higher

Restart of oil production in Libya (Brent: $107.9)

Oil production in Libya’s Es Sider and Ras Lanuf is being brought back online after a 5-day strike that halted nearly 0.5mbpd production and exports. In Egypt tensions still run high, but temporary PM Hazem el-Beblawi is now expected to hold general elections before the previously stated 6-month timeframe. Oil prices will be naturally buoyed by the ongoing geopolitical tensions.

U.S. oil inventories

Later today (16.30 CET) the official U.S. oil inventories will be published. Last week's surprisingly high draw on crude sparked a minor rally in prices. Expectations are currently: Crude (-3.3mbbls) Distillates (+1.3mbbls) and Gasoline (+1.2mbbls). Any major deviations would affect the short term price action.

Recommendation

We recommend clients to use setback to enter hedges, in the current unstable geopolitical environment prices seem to be aiming higher. We estimate 112 to be the next short term price target.