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By Michael Poulson, A/S Global Risk Management

Oil is strengthened by continued weak dollar and news of Saudi Arabia cutting production to 2-year lows.

Saudi Arabia continues to show that the huge oil producer is actually "walking the talk" about cutting production and complying with the OPEC and non-OPEC deal. The country's energy minister yesterday stated that production fell to 2-year lows of below 10 mio. barrels per day which is below the agreed 10.058 mio. barrels per day level. The minister further stated that next month would show even lower level. More clues on the organisation's crude oil production will likely come when OPEC publishes its monthly report next week. Next week also sees the inauguration of Donald Trump and next weekend a control committee (OPEC deal) meeting in Vienna.

Overnight, Chinese trade activity data pointed to record crude oil imports (8.56 mio. bpd) in December. However, the country's exports of refined oil products also increased compared to November data. Chinese Exports in general fell by -6.1% (-3.5% previous), Imports dropped by 3.1% (2.7% previous). In her speech last night, Fed's chair Janet Yellen did not reveal any news as regards future interest rate hikes. This afternoon, U.S. trade data (retail sales) is published and one of the last publishings today will be the weekly oil rig count from Baker Hughes. The number of active drilling rigs in the U.S. has increased for more than two months and is now around one-year high.

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A/S Global Risk Management is a provider of customised hedging solutions for the management of price risk on fuel expenses. The company has offices in Denmark and Singapore. For further details about its risk management products and services, please call +45 88 38 00 00 or email hedging@global-riskmanagement.com.