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Fuel oil trend

Rotterdam: $ 2 lower
Singapore: $ 6 lower
US Gulf: $ 1 lower

Increased oil demand expectations and afternoon volatility (Brent: $108.6)

Yesterday's EIA weekly oil inventory data showed a larger-than-expected build in crude oil (3.267m. versus 2.650m expected), smaller-than-expected draws in gasoline (-1.853m versus -50m expected) and distillates (-731m versus -2.283m expected). Refinery utilization was at 1.0% versus -2.1% expected. U.S. refineries are heading into the maintenance season, which could lower demand for crude oil temporarily.

The U.S. Congress approved the debt limit increase yesterday; bringing relief to the financial markets which feared a prolonged discussion.

In Libya the yo-yo oil output continues; protesters having shut pipelines to the Wafa oilfield and threatening to close a pipeline from the large El Sharara field.

In its monthly report, OPEC revised world oil demand growth for 2014 up to around 1.1 mbpd (up by 50 tbpd from the month before); world economic growth expectations for 2014 remain at 3.5%.

Later today, U.S. retail sales and job reports will be in focus. Tomorrow we will see a number of European GDPs and Chinese key numbers. We expect volatility around these numbers as China has experienced swindling growth numbers lately and growth signs in the euro zone are still fragile.

Recommendation

We particularly advise consumers to take note that the low inventories for distillates and lighter products could lead to fundamentally firmer prices.