WTI and Brent crude futures came under pressure due to growing expectations that OPEC will take a decision to boost production in its upcoming meeting, however prices did receive support on the back of weakness in USD-Index. OPEC news: • According to a Gulf delegate, OPEC will raise its oil output target tomorrow, and OPEC ministers have agreed on need to raise production. The Gulf delegate added that extra OPEC oil is needed to make up for Libyan loss and demand in the second half. Also, Kuwait oil minister said he sees need for more oil in the market, adding that he expects the OPEC to increase output at its Wednesday meeting. He further said that OEPC needs to act due to Libya and Mid-East unrest. • The IEA chief economist called on OPEC to boost oil output, adding that current oil prices can derail the economic recovery. He also said that oil demand will be growing strongly going forward, adding that high oil prices is a question of supply-demand, and not speculation. • However, Iraq oil minister said current level of oil prices is not too high, adding that a reasonable oil price is between USD 100-120 per barrel. He further said that world oil market is well supplied at present, and Iraq is unlikely to be subject to OPEC quota in the next couple of years. He also said that there is no need for OPEC to increase production. Oil & Gas News: • According to an article in FT, Saudi Arabia has been quietly increasing its crude oil production ahead of Wednesday’s OPEC meeting, in a sign that Riyadh is trying to bring oil prices down to more comfortable levels for consumers in the US, Europe and China. Also, according to a Gulf industry official, Saudi Arabia plans to pump 9.5-9.7 MBPD in June, its highest level since July’08. • Iraq cut its long term oil production forecasts, and plans 8 MBPD production by 2025 against its previous plan of 12 MBPD by 2017. • China said it hopes for major breakthrough in gas talks with Russia before President Hu’s visit, adding that both sides are engaged in active work and negotiations over Russian natural gas supply deal. Meanwhile, according to a Reuters poll, China’s major refineries will cut June throughput by 2.8% from May to the second lowest level in 15 months. Geopolitical News: • Syrian forces fought gunmen in battles that left more than 120 members of the security forces dead, and the government said that the army will respond firmly and will intervene. • According to an alliance official, NATO jets conducted daytime raid on Tripoli to step-up pressure on Gaddafi. • Saudi Interior Ministry said three Saudi border guards were killed by a man attempting to cross into Yemen. Corporate News: • Officials from Iraq and Royal Dutch Shell are set to meet next week as the two sides come closer to finalise a USD 12bln natural gas venture. • ExxonMobil reported flaring at 238,600 BPD Joliet, Illinois, refinery. Weather news: Weather Derivatives forecast sees average temp. in the US for the next 6-10 days to be 0.3F above the average at this time of the year. The data is accurate as that of 6th June, 2011. According to the NHC, a large low pressure area is centred over the North-Western Caribbean Sea about 100miles South-Southwest of Grand Cayman, which has a 30% chance of becoming a tropical cyclone in the next 48 hours.

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