Brent crude rallied on Monday as Japan and China showed signs of healthy demand. The Japanese Finance ministry has said their imports rose 9.1% in April from a year ago and China imported a record 7.32 million barrels in April as healthy car sales increased demand. Tension in the Middle East has also given traders reason to push prices higher. Having quickly taken the city of Ramadi 60 miles west of Baghdad, ISIS have set the Baiji refinery ablaze in an effort to deter oncoming Iraqi forces. The refinery was captured last year and the inferno is unlikely to have any major impact on global supply but it highlights the willingness of ISIS to sabotage oil assets if they are forced into retreat. Brent crude hit low in January but has since made a steady move higher as investors bet on higher prices in the second half of the year.  

European shares ended in the red as Greece sails towards a possible default. Investors were unnerved by comments from the Greek government that suggested they may not be able to make repayments to the IMF in early June. London and Frankfurt were closed but markets in Italy, France, Spain and Greece remained open and headed south in thin trade. The US was also closed so the full impact of recent Greek comments may not be seen until Tuesday’s trading. The results of Spanish local elections also sapped optimism after the ruling party suffered heavy losses. Mariano Rajoy bore the brunt of voter’s discontent after years of spending cuts and high unemployment. “There is no doubting that Greece has become a frequent recurring risk to investor sentiment in recent months, and there is potential for investor sentiment to be pulled down even further by the news that anti-austerity parties were declared victorious in several local elections in Spain,” said Jameel Ahmad, analyst at FXTM.

The Greek interior minister Nikos Voutsis has today said what most economist have feared for a long time now, Greece will be unable to pay money due to The IMF in June. Mr Voutsis said Greece simply does not have the money to hand over. The announcement has come after weeks of fruitless discussions between Greece and the IMF, EU and ECB over how Greece is going to service its EUR320 billion debt mountain. Many, including some from within the Greek government say Greece will never be able to repay creditors. Greece is due to repay 4 instalments of EUR 1.6billion to the IMF throughout June, the first being on 5^th June. The latest development brings a potential ‘Grexit’ closer and increases the probability of significant market turbulence in the coming weeks. “It would be a disaster for everyone involved,” said Greek finance minister Mr Varoufakis