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Today's Trends

Rotterdam (ARA) fuel oil - trading $9 higher
Singapore fuel oil - trading $10 dollar higher
US Gulf - expected to open $6 dollar higher

Oil prices increased Thursday and Friday as the unemployment data from the US came out better than expected effects from the Stress Test results leaked earlier during the week and especially due to ECB have joined other central banks in asset purchases, which will ultimately increase inflation. Markets lost some of the optimism late Thursday as worries returned due to low demand on US government debt auction.

Unemployment increases but in a slower pace

US jobless claims came out Thursday with 590,000 initial and 6,351,000 continuing claims. Better than expected, but continuing claims are still increasing. The official unemployment data will be released later today and stock and oil markets are supported by this positive expectation.

The European Central Bank starts the printing press

The British and European central banks cut interest rates as expected. Not really an event. The more interesting issue was the announced buying of bonds. The European Central Bank has until now not been taking part in the printing money and buying bonds strategy, but they announced Thursday they will support liquidity by buying for 60 billion euros of covered bonds.

The British national bank increased their asset purchases by GBP 50 billion more and said a weak pound will support the economy. Now all the major economies, US, UK, Japan and EU are printing money. Oil was increasing to record levels last year, part due to a hedge against inflation and here only the US central bank was supporting the economy. Now the top 4 central banks are in support mode and this will support oil prices - especially when the economies recover.