---

Trends

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

FED and OPEC meeting are today’s main course (Brent: $108.3)

Later today, OPEC will meet up in Vienna to discuss their official output target. Throughout the year the target has been 30.0m bpd for the Group. The actual output was however consistantly in the range of 31-31.5 mbpd. Given the latest signals and production numbers out of Saudi Arabia (down 500,000 bpd from the high this summer!), OPEC might adjust the official target a tad downwards, but in reality the cut has already taken place. All other things equal, the spare production capacity in OPEC (read: Saudi Arabia) has risen, and will help dampen any potential price spikes.

At 18.30 CET today the Federal Reserve will announce its interest rate. Given that it is already down at 0.25%, a cut would theoretically spur lending, but here in the practical world it would matter little besides the signal value. Instead the markets will monitor very closely for any hints of renewed QE 4.0. As "Operation Twist" will come to an end this month, the possibility of a new "Operation creativity" should not be neglegted. In the event of a new round of QE, oil prices are likely to spike short term, before setteling at a slightly higher than current levels.

Recommendation

As always, we advise consumers to establish hedges during market dips. Currently, we are seeing on of these dips across the product range! Particularly heavy fuel prices have been slammed, providing good buying opportunities for consumers. The position squaring by speculators are giving favorable opportunities during this and next week.