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Today's Trends

Rotterdam (ARA) fuel oil - trading $6 lower

Singapore fuel oil - trading $3 lower

US Gulf - expected to open $15 higher

Oil prices increased on Thursday as positive jobless claims indicated that unemployment trends are turning. Earlier this week the Case Schiller index indicated that the US house prices are turning

Today, Japan PMI manufacturing came out with a reading just above 50, indicating that growth is returning. From Europe unemployment figures showed an increase to 9.4% where 9.7% was expected. July inflation numbers came out for Japan (Tokyo CPI) and Europe at -1.8% and -0.6% respectively. Oil prices are currently down on the low inflation in Europe.

Later today, the US numbers on GDP, wages and growth indicators will be of interest.

Floating storage growth shifts to gas

In the beginning of this year, crude oil became lucrative for floating storage. Then the traders turned to product tankers with distillates and now the latest is floating storage on LNG. According to Reuters 2 LNG vessels have been hired for storage in Japan. LNG storage is very costly so current supply must be very large. There are indications that oil product floating storage is lowering. As floating storage shifts away from oil markets it is a first indicator of falling inventories.

US jobless claims signals turnaround

The release of the US jobless claims supported oil prices on Thursday as continuing claims - a proxy for unemployment fell to a 3.5 month low. The number came out at 6.2 million claims where 6.3 were expected - another signal of recovery as jobs returning. However, initial claims came out at 584,000 where 570,000 was expected. If initial claims continues to increase the next weeks, continuing claims and hence unemployment will start to increase again.