---

Trend

Rotterdam: $ 1 higher
Singapore: $ 8 lower
US Gulf: $ 1 lower

Expectations of a diplomatic solution in Syria (Brent: $111.4)

Yesterday, Syria accepted a Russian suggestion of handing over its chemical weapons – and thereby paved the way for a diplomatic solution to the dispute. U.S. President Obama pledged to explore the Russian plan, but remains cautious. The news of a delayed or even deleted military operation against Syria made oil prices drop.

On the supply side, hopes have increased of a pick-up in Libyan oil exports – at present the country's oil production is approx. 150,000 bpd versus 1.6 mio. bpd. capacity. For several weeks, Libya's oil production has been hit by strikes and unrest. Later today, at 16.30 the EIA weekly oil inventories will be published. A draw in crude and gasoline stocks and a build in distillates are expected.

Recommendation

Despite the confusion on where the U.S. stands on a military strike on Syria, the geopolitical environment is still tense. We continue to see risks of a sharper upwards move materializing. We continue to advise clients to take advantages of outlier in prices. For consumers the current dip in prices seems to be such an outlier.