---

Trends

Rotterdam (ARA) fuel oil - USD7 lower

Singapore fuel oil - USD3 lower

US Gulf fuel oil - USD2 lower

Norwegian oil workers still on strike. Lockout due Monday (Brent: $100.0)

Following a pension reform agreed in the Norwegian parliament, oil companies altered a pension scheme for offshore workers. Employees subsequently went on strike on 24 June. Oil companies have responded by warning of a lock-out on Monday. Already Norwegian production has been affected by approximately 300,000 bpd. Total Norwegian production 1.6-1.7mbpd. In the highly unlikely event that Norway, the world's 8th largest exporter, will halt its production on Monday oil prices would start a serious upwards move. However, we strongly believe the Norwegian government will force parties to enter an agreement during the weekend. Ceteris Paribus, prices could therefore experience a minor correction on Monday. Keyword: minor.

Yesterday, the ECB cut the benchmark lending rate by 25basis points to 0.75%. Despite the calendar showing summertime, Chairman Draghi was not all sunshine on the Euro Zone economy. The deposit rate is 0%, which under "normal" circumstances would seriously spark bank lendings to the public. Draghi’s negative comments at the press conference sent Brent tumbling from 102.5 towards 100.

Later today (14.30 CET) US non-farm payrolls are due. A number usually capable of moving oil prices.

Recommendation

A lot of volatility is scheduled ahead. As liquidity usually decreases over the summer clients are advised to take advantage of any "outliers" in prices. Sparked either by news from the Middle East or the never-ending global debt story. We recommend consumers to enter hedges should it suit your budgets.