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Fuel oil trend

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

Key event: U.S. Nonfarm payrolls this afternoon (Brent: $103.4)

The ECB cut interest rate by a quarter point to 0.25% yesterday. Main reason for implementing the rate cut is the low inflation in the euro zone (lowest in 4 years) – indicating that the crisis is far from over in the area. Market consensus was an interest rate cut in December and the news caused some volatility in the commodities markets – including oil – as the Euro fell against the dollar.

The U.S. GDP came out better than expected (2.8% versus 2.0% expected) - adding to expectations of a soon-to-come tapering of Fed's bond buying programme. All eyes will be on this afternoon's nonfarm payrolls and unemployment rate from the U.S. and volatility will be high.

The shale oil production in the U.S. continues to increase – U.S. crude output climbed to 7.9 mio. bpd according to recent data from the EIA.

Recommendation

Trading range continues the downward trend. We expect technical support for oil prices at $102.5 at resistance at $104.5.