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Trends

Rotterdam (ARA) fuel oil - Trading USD 5 lower

Singapore fuel oil - Trading USD 20 lower

US Gulf fuel oil - Expected to open USD 10 higher

The powder keg still burning

Reports from Libya now indicate that output is down 75% of the 1.6 million barrels per day production meanwhile Gaddafi is firming his grip on Tripoli, but is steadily becoming more isolated in the capital. Yesterday's gun-down of protesters in a mosque near Tripoli fuelled the protestors rage even further.

As the violence escalates more oil companies are evacuating employees. China planning to help up 30.000 citizens leave Libya. Brazil's largest oil company Petrobras, as well as British Petroleum, is also reported to have evacuated workers.

For now prices have stabilized as Saudi Arabia informs they are considering alternatives as to how they could supply Europe. Should the unrest spread to Algeria or even Saudi Arabia, expect prices to become anything but stable.

Recommendation

If Saudi Arabia starts to rumble 120 dollar per barrel is cheap. If not and Gaddafi leaves and peace and quiet spreads the involved countries 120 dollar is expensive. We highly recommend both consumers and suppliers to use option strategies to secure against the further development.