---

Trends

Rotterdam (ARA) fuel oil - Trading USD 2 lower

Singapore fuel oil - Trading USD 2 higher

US Gulf fuel oil - Expected to open USD 2 lower

Israel insists on right to defend itself (Brent: USD 123.8)

The meeting between U.S: President Obama and Israel’s Prime Minister Benjamin Netanyahu ended with Israel reserving its right to defend itself and keep Iran from acquiring a nuclear weapon. The rhetoric surrounding the Iranian nuclear issue continues in a harsh tone. Despite the U.S. publically pursuing a diplomatic solution, evidence that Iran might be very close to nuclear warheads is likely to change their stance in a heartbeat. In the upcoming April/May issue of Science and Global Security Journal, Swedish atmospheric scientist Lars-Erik De Geer is to publish a paper on a possible Iranian nuclear denotations test in North Korea in 2010. As high politics (US, Russia, China etc. all have directly or indirect interest) have already kicked into gear, the uncertainty will most likely continue and thus the volatility of oil prices.

Iraq pumping at highest levels since 1979 (+3mbpd)

Iraq’s oil minister stated that "Iraq is pumping more than 3 million barrels a day of crude – the highest average output since Saddam Hussein seized power in the country 33 years ago". However, Iraqi production has been steadily increasing for months and this is still not sufficient to offset the missing supply mentioned in our extraordinary supply update.

Today is Super Tuesday in the US where a large number of states hold primary elections to select delegates to national conventions. Candidates must traditionally do well on this day to secure nomination for presidential candidate.

Recommendation

We recommend clients to prepare for volatile prices ahead. Despite the whole debt debacle in western countries, global oil demand is already higher than in 2011 (and 2010, 2009, 2008). In combination with missing production, any drop in prices might be rather short-lived. The next technical resistance level is USD 127 – support level is USD 118.5.

The best time to plant a tree was 20 years ago - the second best time is now!

Is your fuel budget getting out of control due to the steep increases in oil prices? There is still time to make some "damage control" if you did not secure your fuel price budget before the recent oil price increases – contact us to learn more about your options (hedging@global-riskmangement.com / +45 8838 0000).