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Uncertainty is driving oil prices - important events ahead .....

Oil prices have taken a dive for the past weeks - uncertainty is driving the prices: how will the election in Greece turn out, will the bans on Iran’s oil exports be effected, will the US numbers improve etc.

We have gathered the most important events to occur in June which could affect companies exposed to oil price fluctuations.

7 June Chairman of the US central bank (FED) will testify before the Senate on the US economy. Lately the macronumbers have shown a slowing recovery, but a recovery nonetheless. The current recovery of jobs from the 2007-09 recession, is faster than the 2001 dot-com recession.

13-14 June The 5th OPEC International Seminar will take place in Vienna. At the past OPEC meeting a total production of 30 million barrels per day (mbpd) was agreed - a number far below production levels for the past couple of months (31- 31.4 mbpd). The current price drop will have a major effect on OPEC budgets. Following the Arab Spring, many Middle Eastern Countries ramped up public spending. Saudi Arabia as a result exceeded its budget with 34%.

17 June Greece will vote a second time to find a new government. A vast majority (70-80%) of Greeks wish to remain in the Euro. However, the implementation of the austerity measures is not going down well in the Greek population. Polls vary between showing a lead to “pro-bailout” - parties agreeing that austerity has to be implemented, to receive bail-out money - and “anti-bailout” – parties wishing to renegotiate the bailout deal, and not implement the tough measures. Countries providing the bailout have clearly stated that there will be no re-negotiation.

18-19 June Iran will meet with the five permanent members of the UN Security Council and Germany (P5+1) to discuss their nuclear enrichment program. Iran insist they are building underground facilities for peaceful purposes (medical treatment/ research and power stations), whereas the western countries suspect Iran of building a nuclear bomb. EU and US are to implement very strict sanctions on Iran starting 1 July, if no agreement is found at the meeting in Moscow. P5+1 and Iran have held 2 previous meetings in 2012. Istanbul and Baghdad sat the stage at those occasions.

For the month to come; volatility will be on the menu

Our base case scenario is a range of $90-105 for the coming weeks, but it is highly dependent on the above events. We recommend you to remain in close contact with your dedicated Oil Risk Manager to identify the risk for your business.