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Trends

Rotterdam (ARA) fuel oil - Trading USD9 higher

Singapore fuel oil - Trading USD9 higher

US Gulf fuel oil - Expected to open USD1 lower

Spin doctors working overtime (Brent: $111.2)

Tug-of-war spark oil volatility

Whilst Germany is trying to lower the expectations for the upcoming weekend (comment from Merkels spokesman on Monday), today France is out raising the expectations again. Further rumours have "escaped" the inner circle, hinting the current rescue fund would be leveraged by three to five times. Instead of bailing out an entire country, the fund would be bailing out investors in Sovereign debt (mainly French and German banks) by guaranteeing a minimum payment for all sovereign debt. Even in the case of a default banks would still receive 20-50 percent of the face value. We see range-trading of 108-115 until October 23rd as investors are trying to figure out what a solution might look like.

Oil inventories surprise, what a surprise..... The inventory numbers from API showed, once again, draws which exceeds expectations. Later today the official EIA inventories will be out, most likely showing bigger draws than market consensus...again.

Release: API oil data (Consensus)

Crude: -3,100,000 barrels (1,800,000)
Distillates: -2,200,000 barrels (-1,400,000)
Gasoline: -1,600,000 barrels (1,300,000)

Bullet points

- Secretary of State Hillary Clinton visits Libya to promote new Libya-US Partnership

- Mexican Presidential candidate open up for private investors in Pemex (stateowned monopoly), thereby hoping to spur productivity and output. Current output is 2.6m b/d vs. 3.4m in 2004.

- Moody's cut rating for Spain by two notches (Aa2 to A1), and still negative outlook.