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Fuel oil trend

Rotterdam: $ 3 higher.
Singapore: $ 7 higher.
US Gulf: $ 1 lower.

Geopolitical update (Brent: $110.3)

In Libya, the yo-yo production suffered (yet another) setback. After reaching a production of almost 700,000 bpd (which was still only 50% of pre-war levels), rebels and the Tripoli government clashed – again - resulting in a loss of production of nearly 300,000 bpd. As we've mentioned on earlier occasions the unstable security situation will mean a very unstable oil production and the spillover effect into oil prices is expected to continue.

The South Sudanese government is also challenged with rebels, who now supposedly control the capital of the Upper Nile state. The production in South Sudan was previously at 350,000 bpd, but has shrunk significantly, firstly due to clashes between Sudan and South Sudan over pipeline terms, and now due to local rebels controlling production areas. There does not seem to be an solution to the clashes shortly.

Official U.S. oil inventories (EIA) will not be published today, but tomorrow at 17.00 due to Presidents' Day on Monday.

Recommendation

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