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Trend

Rotterdam: trading unchanged
Singapore: $ 4 higher
US Gulf: trading unchanged

Oil prices remain around $114 as the geopolitical risk premium stays high

Unrest in Egypt continues and the U.S. still seems ready to conduct a military strike against Syria – most likely it will only be a matter of time. The markets fear a spread of unrest in the region and thus oil supply disruptions. Million-barrel-per day oil exporter Iraq is experiencing sabotage and scheduled maintenance which is likely to reduce exports by up to 500,000 bpd.

Improved PMI data from both Europe and China point to recovery in the world economy in general. The most important economic market movers this week will be Thursday's ECB meeting and following press conference and the U.S. jobless claims and unemployment rate on Friday. We expect some volatility around these numbers.

Recommendation:

In the current environment prices seem to be aiming higher and we expect prices around $115 before the week ends. The week's many ecomomic key numbers combined with the risk of escalation of the conflict in Syria will give a lot of oil price volatility and we recommend our clients to use outliers in prices to secure hedges when it suits the budgets.