Image credit: A/S Global Risk Management

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Oil prices saw heavy volatility yesterday on mixed news.

The uptrend in oil prices started on news that Saudi Arabia is comfortable with oil prices climbing above $80 per barrel. Next week, OPEC and a row of non-OPEC oil producers will meet in Algeria to discuss oil market balance. Likely the coming U.S. sanctions against Iran will be discussed as well and how/if the market will compensate for the missing barrels when sanctions kick in from 4 November. In June, the parties agreed to increase supply from July; however, aparently Saudi Arabia's exports did not increase in July, but fell to 7.12 mio. barrels per day, from 7.24 mio. barrels per day. On the other hand, Russia's energy minister said that a long-term price of oil would be around $50. OPEC's secretary general stated that demand is "robust, despite some of the headwinds in the medium to long term".

The weekly oil stocks data from the American Petroleum Institute (API) last night pointed to a drop in U.S. crude oil inventories rose by 1.2 mio. Barrels to 397.1 mio. Barrels. Distillates stocks also increased. Now all eyes will be on this afternoon's weekly oil inventory report from the Energy Information Administration (EIA) (16.30 CET). Consensus for this afternoon's data is a 2.7 mio. barrel-draw in crude oil inventories.

Turning to economic data, today sees Bank of Japan press conference, UK CPI and U.S. housing data. Also ECB's president Draghi speaks later today.