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Fuel oil trend

Rotterdam: $ 4 lower
Singapore: $ 4 lower
US Gulf: $ 1 lower

Supply/demand and easing geopolitical tensions weigh on prices (Brent: $98.9)

Yesterday, the weekly API oil inventory data showed a larger-than-expected drop in crude stock, larger than expected builds in distillates and gasoline stocks. This afternoon (16.30 CET), the EIA oil inventory report will be published. Last week showed draws in crude and gasoline stocks, build in distillates; the same outcome is expected today.

Ample supply is weighing on prices; among others, oil output from Libya has increased to 740,000 barrels per day and the large North Sea oil field Buzzard has restarted. Tomorrow, Gulf Arab oil ministers will meet and one of the topics could be the recent drop in oil prices. Comments from the meeting will be followed closely.

Geopolitical tensions seem to ease somewhat: 1) Ceasefire between Ukraine and rebels seems to continue and the EU has consequently decided to postpone additional sanctions against Russia. 2) A new government and thus prime minister, Haider al-Abbadi, has been approved in Iraq, raising hopes that he will be able to unify the war-torn country and create stability.