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Fuel oil trend

Rotterdam: $ 2 lower. Singapore: $ 5 lower. US Gulf: $ 1 higher.

Expect more volatility in 5-6 hours (Brent: $106.9)

Yesterday's U.S. Jobless Claims came out pretty much spot on expectations, but it seemed to kick off a downwards move in oil. This morning Brent has rebounded by almost a full $1. Later today at 14.30 CET the always important non-farm payroll will be published. Usually this is an event that sparks a lot of volatility. We advise cliets with short-term positions to be vigilant around the publication of the figures.

In China crude imports increased to an all-time high of +6.3mbpd. Additional Chinese refineries are expected to open throughout 2014, which is likely to boost imports even further.

Recommendation:

We expect the present dip in oil prices to be short term and the level could be a buying opportunity for oil consumers if it fits your hedging strategy. We expect major support around $104-104.5 but currently the upside looks to have more potential than the downside, especially for lighter products.