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Trends

Rotterdam (ARA) fuel oil - Trading USD11 higher

Singapore fuel oil - Trading USD12 higher

US Gulf fuel oil - Expected to open USD 1 lower

Central banks boost market confidence (Brent: $105.6)

Rebound cocktail on its way?

Both the European Central Bank (ECB) and the Bank of England (BoE) announced the re-introduction and enhancement of liquidity programs. ECB increases the buying of bank bonds with EUR 40bn, and BoE increased with GBP75bn. Combined with 12- and 13- months funding windows from the ECB this helped spur market confidence for a recovery. Oil prices are still riding the numbers from Wednesday showing huge draws from inventories. Throw in a more positive sentiment for growth, and crude prices nearing break-even prices for producers, and a rebound cocktail is the outcome.

US Job numbers will add its two cents to a bullish week for oil -  most likely outcome is sideways.v Later today (1430 CET) job creation numbers from the US (non-farm payrolls) will be determining the closing prices of the week.

Recommendation

We recommend using the volatility in the market to establish new hedges. Currently we expect the range 100 -108 for the coming days. Two digit oil prices are difficult to see today and early next week. Hedges entered towards 100 are considered attractive looking into 2012.