WTI crude futures traded in minor negative territory in early European trade as debt concerns surrounding peripheral Eurozone countries persisted, however moved back in positive territory later in the session as the USD-Index lost strength. Oil & Gas News: • China’s oil demand this year may slow to 6.7% to 482.96mln tons, slowing from 9.6% growth in 2010, while gasoline demand may increase 4% to 22.33mln tons after 3% gain in 2010, according to Zhang Fuqin, Deputy Chief Engineer at China National Petroleum corp’s Petroleum and Petrochemical Engineering Institute. • Merrill Lynch said they see support for August gasoline crack at USD 17-19, they see little support for gasoline at the end of summer. They also said that US gasoline demand may be flagging this summer. • Iran’s oil and gas reserves have risen by 500MBPD and 5tln cubic feet respectively with the discovery of new onshore oil and gas fields in the south and west of the country, according to Kayhan Daily newspaper. • Iran president Ahaminejad’s role as caretaker of country oil ministry will not affect Iran’s policies on oil or OPEC according to foreign ministry spokesman Mehmanparast. • Libya’s top oil official, Shokri Ghanem, has stepped down from his post according to rebel finance and oil minister. In other news, Ali-Tarhouni, the rebels finance and oil minister, said he hopes to represent Libya in the upcoming OPEC meeting in June. Geopolitical News: • According to UK, NATO struck Libyan intelligence and Training facilities in Tripoli overnight. • Iran’s foreign ministry denied a U.N report that Tehran had exchanged missile technology with North Korea. Corporate News: • BP’s proposed USD 7.8bln share swap and Arctic exploration accord with Rosneft collapsed after the UK producer wasn’t able to persuade the Russian billionaires in its existing joint venture to back to deal. • Royal Dutch Shell said co. may be the biggest beneficiary of President Obama’s pledge to “increase safe and responsible oil production”. The administration is creating ‘a new team to co-ordinate work on Alaska drilling permits’ and extending leases in the Artic and in the Gulf of Mexico. In other news, co. said the Martinez refinery in California, had a small equipment leak, however was isolated and addressed within an hour. • ConocoPhillips and Karoon Gas said they aim to start drilling in the Browse Basin off the coast of northwest Australia in Q2/Q3 to evaluate the potential of natural gas discovery. Weather news: Weather Derivatives forecast sees average temp. in the US for the next 6-10 days to be 4.0F above the average at this time of the year. The data is accurate as that of 16th May, 2011. The NHC reports that there are no tropical cyclones at this time.`

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