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Fuel oil trend

Rotterdam: $ 1 lower
Singapore: $ 7 higher
US Gulf: $ 4 lower

Demand worries continue to weigh on prices (Brent: $97.6)

A number of indicators are pointing to lower oil demand along with ample supply. Chinese inflation data this morning showed Consumer Price as well as Producer Price Indices both came out below expectations indicating growth slowdown. OPEC demand forecast lower for both 2014 and 2015. European inflation data came out around expectations this morning.

Oil inventories showed surprisingly large builds in distillates and gasoline inventories, draw in crude stocksaround consensus - see below data.

Release: EIA oil data (Consensus)

Crude: -0.972M barrels (-1.114M)
Distillates: 4-094M barrels (0.571M)
Gasoline: 2.381M barrels (-0.157M)
Refinery utilization: 0.6%

In a report published yesterday, OPEC cut demand forecast for its products by 160,000 bpd. OPEC member Saudi Arabia is the group’s largest oil exporter – but also the largest consumer of petroleum in the Middle East and heavily dependent on the black liquid - with oil exports accounting for 85% of the country’s revenues (2013). According to OPEC, Saudi Arabia has cut its output in August by 400,000 barrels to 9.597 mio. bpd (from 10.005 bpd in July). But as Libya production is back online with currently approx. 740.000 bpd, total OPEC output seems to still be above the 30 mio. bpd target.

Only remaining important economic key data today is the Initial Jobless Claims and Federal Budget Balance from the U.S. and the monthly report from the European Central Bank.

On the technical side, if Brent closes below $97.2 level, next downward support level could be a closing around $96.