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Fuel oil trend

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

OPEC production dropped last month (Brent: $107.3)

For the first time in months (possibly years), OPEC is producing significantly below its target. March production came out at 29.6 mbpd, well below the 30 mbpd target. Main reason was cuts by Saudi Arabia to 9.57 mbpd (approximately 0.6mbpd below peak production) and Iraq to 3.48 mbpd (down nearly 0.3 mbpd from a +30 year production high).

Got gas?

Western countries and Russia have a bit of a disagreement over satellite photos showing 35-40,000 Russian troops near the border to Ukraine. Western countries claim they were taken 3 weeks ago, whereas Russia claims they are from a military exercise in August last year. Meanwhile Russian President Putin secured political go from the parliament to enter Ukraine with troops, should the Russian minority in Ukraine suffer from turmoil. Meanwhile Putin is growing tired of delayed payment by Ukraine on old gas bills to Gazprom. Gas prices have been hiked, and potentially the gas will be shut off. As Europe is receiving most of its Russian gas by pipelines through Ukraine, this would also largely impact Europe, something Russia is very much aware of. There are no signs of things settling down, but we continuously do not estimate a military escalation.