Deutsche Bank

Commodities rebounded for a second day. Newsflow on three fronts drove
energy prices higher, in our view. First, oil markets seem to view the situation in
Bahrain as a microcosm of a larger Sunni vs. Shi’a confrontation that could spill
over into Saudi or Kuwait. Second, the Libyan situation has taken a new turn, with
the UN approval of a ‘no fly” zone. Third, increasing weight is being given to the
potential massive impact on demand for other fuels stemming from the rising
“vote of no-confidence” in nuclear safety in view of events in Japan. The world
gets 5.4% of its energy from nuclear power. If 10% of it had to be shut, it would
be the equivalent of 1.6% more oil, 2.3% more natural gas, or 1.9% more coal.