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Last night, the weekly U.S. oil stocks data from the American Petroleum Institute (API) pointed to a surprise build in U.S. crude oil stocks of 1.8 mio. barrels. Gasoline stocks fell by 1.5 mio. barrels while distillates increased by 2.7 mio. barrels. Now this afternoon's oil inventory report from the Energy Information Administration (EIA) will be followed closely, expect increased volatility around the publishing (16.30 CET). Consensus is a draw in crude, builds in gasoline and distillates.

A geopolitical dark horse re-entered the markets overnight as North Korea fired test missiles which allegedly landed in the Sea of Japan. The UN Security Council will meet today to discuss the situation. Also, the Japanese prime minister has called for emergency meeting of the cabinet and South Korea conducted a "precision missile-firing drill" while the U.S. president stated that "It is a situation that we will handle".

It is the day before the day..... Tomorrow, the majority of the world's oil producing countries will meet in Vienna to discuss a potential extension of the current oil production cut deal which is valid until end of March 2018. The aim of the deal is to reduce global oil inventories to 5-year average; and though the inventories have been reduced since the deal took effect in January, there is still some way to go. Expectations have been that the group of oil producers will extend the deal by 9 months. However, recently non-OPEC oil producer Russia has failed to express full commitment to the extension, hence some market participants worry if the deal will at all be extended and/or if the period will be the 9 months previously expected.

Turning to economic data front, today sees German and Spanish inflation data, EU consumer and business confidence data as well as Fed's Janet Yellen speaking on the economic outlook along with a string of other Fed member speeches.