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Trends

Rotterdam (ARA) fuel oil - $7 higher

Singapore fuel oil - $1 lower

US Gulf fuel oil - $3 lower

Several important oil news has hit the wire in the past 24 hours

On the geopolitical and security level: Israel’s Prime Minister Netanyahu made a surprise move by forming a government with the biggest opposition party. The government now has backing from 94 out of 120 seats in parliament. Any decisions to initiate a unilateral and pre-emptive strike on Iran’s nuclear facilities could now be agreed very swiftly.

The US Department of Homeland Security has become increasingly worried of a cyber attack on the domestic oil and gas pipelines. Several attempts to gain access to the pipelines' controls systems by targeting the inbox of key personnel (“phishing”) have been avoided. However, as the attacks have increased so has the concern that one attempt might slip through. In 2010 the virus “Styxnet” succeeded in disrupting Iranian nuclear programs.

Greece will run out of money in less than 5 weeks unless it receives the next bailout tranche. The politicians are therefore in a very tight race against the clock to avoid a disorderly bankruptcy. A government must be formed by 17 May. Otherwise it will call for new election and further shorten the time Greece has to meet the austerity measures that followed the first bailout.

The EU Commission is considering slashing the attempt to bring more Biodiesel to European motorists, as reports show a significantly increased pollution might follow the production of Biofuel. Clearing fields abroad to plant e.g. soybeans, which is used as a component, has proven to be less environmentally sustainable than conventional fossil fuels. The 22 million ton/year market is currently worth more than EUR 13bn, so lobbying would delay a potential shutdown.

The refinery maintenance season is coming to an end, and thus crude buying by the refineries is expected to pick up over the coming weeks. It should support prices, as will the talks on Iran’s nuclear program on 23 May.