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Fuel oil trend

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

Forecast: economic growth and oil consumption picking up this year (Brent: $107.2)

Yesterday, the International Monetary Fund (IMF) raised its forecast for global growth by 0.1% to 3.7% for 2014. On the same day, the International Energy Agency (IEA) raised its forecast for global oil consumption to increase by 1.3 mbpd, which would imply a status quo in terms of supply-demand in the – still unlikely – event that Iran will be sanction-free and can export the current "missing" 1mbpd.

The European ZEW Economic Sentiment increased yesterday (from 68.3 to 73.3) as did the German ZEW Current Conditions (from 32.4 to 41.2). Later today, UK key numbers will be published. The improved global growth expectations leading to increased oil demand is potentially bullish for oil prices – even though shale oil production is picking up, the world will still be depending on Middle East and African oil output. The geopolitical situation in the region is therefore a dark horse on oil prices. Today's peace negotiations on Syria will be followed closely.

The weekly oil inventory numbers will be published tomorrow due to the U.S. holiday on Monday.

Recommendation

After numerous attempts, lower oil prices seem to be building up for a bounce. Especially in lighter products we see potential for short term price increases. Heavier products are expected to range trade a bit longer.