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Trends

Rotterdam: $1 lower
Singapore: $5 higher
US Gulf: $2 lower

Money. To print or not to print, that is the question (Brent: $114.20)

As the world’s top financials met at Jackson Hole, Wyoming, chairman of the FED's speech drew much attention. Market participants standing on top of each other to listen for the famous financial crisis lingo: Quantitative Easing (QE). While Bernanke did indeed praise the two previous rounds of QE he did not give any specific hints as to what will happen when the FED meets again on 12 September. The speech included concern regarding the depressed labour market (increased probability of QE) as well as concerns regarding the size of the FED’s balance sheet (decreased probability of QE). What the FED will do, seems to be entirely up to the upcoming macroeconomic figures. We strongly urge clients to prepare for the all-important US non-farm payroll on Friday (16.00 CET).

Furthermore, the German Supreme court will rule whether the EU rescue fund is un-constitutional on 12 September. Massive volatility is therefore to be expected next week. Clients are advised to stay in close contact with their dedicated Oil Risk Manager to calculate potential effects on budgets.

In Venezuela the 645,000 bpd refinery at Amuay is being restarted following several days of fire at the plant.

Recommendation

We expect the oil price to be ranged between $111-116 in the short term. Upside bias is warranted, as the FED has the finger on the trigger, in addition to a potential solution in Europe and a continued tense geopolitical situation in the Middle East. Hurricane season is a wildcard for oil prices.