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After the price slump on Wednesday due to the DoE data, oil futures were largely rangebound on Thursday without a clear direction. When oil prices tested first supports early on, they proved to be strong. WTI also tested its first support towards noon. While crude futures slightly recovered thanks to technical selling in the afternoon, G.Oil at ICE and product futures at NYMEX traded close to their day’s lows. As NYMEX heating oil and gasoline contracts for March delivery expired in the evening, investors were mostly cautious to engage in long positions. Given the bearish Stochastic, G.Oil could not decisively recover. Traders are still rattled by the fundamental situation of the past days. The political deadlock in Italy as well as the lack of concrete results in nuke talks with Iran left the oil market without clear direction. Only when the dollar rose vs the euro in late U.S. trade did the market receive some momentum. Good job market data and a positive Chicago PMI drove the greenback, while the common currency dropped back to its day’s lows as resurgent concerns about the euro zone’s future weighed on the euro. Moreover, a renewed build in U.S. crude inventories as well as potentially declining demand especially hit WTI. Falling to 91.57 USD, the American crude was close to its 8-week low again. As slumping prices of gasoline futures had a bearish effect on crude prices, the expiring gasoline front month contract made investors even tenser. In the end, WTI as well as ICE futures closed with losses. As the Chinese manufacturing PMI expectedly were worse than last year, it hardly made an impact at the market.

ICE Gasoil contract for March delivery settled at 938.25 USD on Thursday. This was 6.00 USD below Wednesday's settlement. With some 52,900 deals, the traded volume was about average.

The stochastic oscillator is still neutral at the Brent chart and its lines are converging again at the G.Oil chart. Thus, both are not giving off any signals this morning. The RSI as well as the Stochastic still indicate an oversold market situation, which favours an upward correction. The Stochastic at the WTI chart has turned into the oversold zone and after a selling signal had been triggered at the beginning of the week, its lines are converging again. Consequently, the indicator also is neutral this morning. After Wednesday’s lows had been breached yesterday, which indicates further downward trends.

U.S.

After suffering some losses in late trading yesterday, oil futures were trading with a strong tendency in the wake of the slightly recovering euro and the rising Asian stock market early this morning.

The traded volume at NYMEX is far above average for this time of day. Market participants are waiting for the European markets to open, for signals from forex trading as well as for a series of economic data and for news from U.S budget talks.

Houston (ex-wharf indications 01-03)
380cst $620
180cst $686
MGO $1014

New Orleans (ex-wharf indications 01-03)
380cst $619
180cst $683
MGO $1013

Singapore (correct as of 1430hrs LT - delivered indications)

The Singapore fuel oil market dropped more than -$2.0 during the morning window yesterday tracking the lower crude. The Asian Fuel Oil crack weakened further on weaker fundamentals. The latest Singapore heavy residual inventory reported a build of +1.21 mbbl to 21.84 mbbl. The delivered bunker premiums were kept around $4.0 above cargo prices. This morning the markets are trading down.

Demand on the delivered front was mixed, with some seeing stronger buying interest while others said demand was consistent with the past few days. Bids for the ex-wharf were at $634/mt. Offers were between $635/mt and $637/mt. Earlier trades were heard at $633.50/mt, when crude futures were weaker. Subsequently as crude futures rose, trades were heard at $635-636/mt.

High premiums for prompt deliveries.
380 cst $635
180 cst $641
MGO $965

Fujairah (delivered indications 01-03)

380cst $628
180cst $651
MGO $980

ARA (Amsterdam - Rotterdam - Antwerp)

Bunker participants reported lackluster demand at the ports of Rotterdam Antwerp and Hamburg. “[The] market is long in fuel oil, but buyers are not fixing,” a source in Antwerp said. A trader in Rotterdam indicated that some suppliers are very keen to get rid of their products offering at aggressive levels for marine gasoil. As a result, MGO was assessed $13/mt lower for Rotterdam at $929.50/mt and $9/mt lower for Antwerp at $931.50/ mt. On the supply side, LSFO was tight for prompt deliveries at the port of Rotterdam on the back busy barge schedules for earlier fixtures. The earliest delivery heard from suppliers is scheduled for March 3 onward. The deliveries were further hampered by barge congestion from Vopak terminal, sources said.

Indications for delivered bunkers:
380cst : $ 602
(1.0 %) :$ 632
180cst: $ 633
(1.0 %):$ 665
MGO 0.1%S: $ 910