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Fuel oil trend

Rotterdam: $ 4 higher
Singapore: $ 3 higher
US Gulf: $ 0 lower

U.S. Holiday today (Brent: $109.0)

As today is a U.S. Holiday (Presidents Day) market volatility should be subdued unless a major unforeseen event occurs. Technical range trading (+/- 50cent from the current level) is the most likely outcome today.

Kuwait power grid (shortly) affect oil production

In Kuwait, the temporary shutdown of three refineries end of January (total capacity nearly 1mbpd), is believed to have been caused by poor maintenance of the electrical grid between power stations and the refineries. In the oil rich states, refineries are completely dependent on the national electrical grid, as they do not operate with on-site power generation. The EIA was quoted on the matter: "Imagine you are driving your car at 200 and suddenly all the systems cut out – how can you control everything? It is very serious". Hiccups in production always spill over into prices if they last long enough for the market to notice. As the electrical grid in Kuwait has suffered from underinvestment for quite some time, it could be one of those intraday dark horses to watch out for in the coming months (and especially during summer time, where all the A/C’s are running full speed).

Recommendation

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