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Fuel oil trend

Rotterdam: $ 2 lower. Singapore: $ 1 lower. US Gulf: Trading unchanged.

Oil still sideways, Wednesday still in focus (Brent: $108.1)

The most interesting, and scheduled, oil related news to hit the headlines today is the private oil inventory (API) numbers at 22.30 CET. Otherwise the market is in a 'wait-and-see' modus for tomorrow's events: Start of US-Iran talks, Speech by FED chairman Bernanke, U.S. home sales and the official EIA weekly oil inventories.

Reuters reported that Saudi Arabia was burning less crude for power generation, down to approx 690kbpd from 763kbpd from 2012 during the peak air condition season June-September. While a major part of the drop can be explained by cooler weather in the desert Kingdom, a higher use of gas, and increased energy efficiency also played a significant role. The lower domestic consumption of crude in Saudi Arabia could open up the door for a higher export ratio and spare capacity. In the short run it will not matter a great deal for global oil prices, but should this be the start of a trend, it would weigh on prices (not below the un-official $100 Saudia Arabian threshold though).

Recommendation

Last week's closing price and bullish momentum has increased the likelihood of a further upwards attempt in the coming days. Resistance is cleared at the 108-ish level and prices seem to be aiming at 110-112 for the next stop. Any setbacks look to be good buying opportunities for consumer should it suit your budget.