---

Fuel oil trend

Rotterdam: $ 3 higher.
Singapore: $ 4 higher.
US Gulf: $ 2 higher.

Mixed oil news (Brent: $106.1)

Drafting of the deal between Iran and western countries regarding the formers nuclear program is scheduled for the end of the month. The most likely outcome by the end of the interim deal (Jul14) is still that some sort of renewed interim deal (6 months-ish) is agreed. Should the missing Iranian oil (1 mbpd from pre-tightened sanctions) return to the market it would short term weigh on prices. Some issues to be aware of in this respect:

(i) Iran has a lot of oil in storage tanks that could be released on rather short notice (28-35m barrels), however (ii) production capacity cannot easily be restored to 100% (it's very difficult to restart an oil well once you've removed the pressure – especially in fields that are 30-40 years old).

In Libya, rebels have agreed to immediately hand over control of 2 out of the 4 oil terminals they control, Zueitine (70,000 bpd) and Hargia (110,000 bpd). The remaining two, Es Sider (340,000 bpd) and Ras Lanuf (220,000 bpd) are supposedly to be handed over "in two to four weeks". There has been quite a bit of smoke and mirrors in the community theatre play, famous for its really long title: "Rebels and Tripoli strike a deal….any minute now…we have a de…wait…no, no deal…but then again…no sorry not this time either…but now the deal is agr…argh no not again…wait, do we have a deal anyway?". Libyan oil returning to the market would be weighing on prices, but until the actual oil starts flowing it should not affect the overall supply-demand.