Oil futures continued their downtrend on Friday. Profit-taking had already dominated at ICE and NYMEX in the course of morning trading as the Chinese PMI released at night was rather disappointing and unemployment rate in Europe rose to 11.9%. Given the fundamentally and technically bearish indicators, oil prices breached several support levels, not least because traders increasingly turned away from the euro and went for the dollar instead. Only when Brent’s support at 110.00 USD and WTI’s at 90.00 limited the downturn did selling pressure decline. U.S. economic data released in the afternoon were rather mixed. However, the rising stock markets supported the market and prevented oil prices from slumping any further. As far as U.S. budget talks are concerned, Democrats and Republicans discussed deep into the night but failed to reach a compromise in the end. Consequently, automatic spending cuts took effect. Fortunately, market participants had already expected long negotiations and thus, adjusted their positions during the day. As a result, oil prices consolidated at a low level without a clear tendency in the evening.
ICE Gasoil contract for March delivery settled at 920.50 dollars on Friday. This was -17.75 dollars below Thursday's settlement. With some 44,000 deals the traded volume was below average.
Neither the Stochastic nor the RSI are giving off any technical signals this morning but both are still showing an oversold market situation. The downtrend remains intact and there still is downward potential. Friday’s lows around Brent’s psychological support at 110.00 USD and WTI’s at 90.00 USD may be decisive today. If these levels were sustainably breached, it might be considered a technical selling signal.
Iraq’s oil exports rose to around 2.54 mbpd in February compared to 2.36 mbpd in January. This is an increase of 7.5%. Via terminals in the Gulf region about 2.2 mbpd were exported from oil fields in south of the country, which is almost 100,000 barrel/day more than usual. Via the Kirkuk-Ceyhan pipeline Iraq exported about 327,000 barrel/day in February compared to 253,000 barrel/day the previous month. Iraq indicated bad weather as the reason for lower exports in January, which hampered loading cargoes for shipping in the Gulf region. Another issue was an explosion at the Kirkuk pipeline that led to export shortages in the northern part of the country.
Early this morning, the euro was able to remain above the 1.30 USD-marker. Since there are going to be significant spending cuts in the USA, the Fed considers reducing its expansive measures and the political stalemate in Italy remains unsolved, the dollar is likely to appreciate, analysts say.
According to BNP Paribas analyst Masafumi Takada, currently, no other currency is as attractive as the greenback. He added that BNP Paribas held long positions in the dollar and was likely to raise them as well. Ben Bernanke renewedly stressed the benefits of an accommodating monetary policy last week but, the release of the FOMC's meeting minutes considered, the pro-accommodating sentiment among the Fed-members seems to wane. Even though Ben Bernanke is the president of the Federal Reserve Bank, the FOMC decides on the future direction of monetary policy. While other central banks have recently stepped up their expansive measures, the US-dollar is likely to appreciate. Accordingly, this week's central bank meetings might bring about new clues. Expectations regarding new measures of monetary policy are mixed. It will probably depend on the outlook the bankers give, Citigroup analyst Greg Anderson says.
This morning, neither the RSI nor the stochastic indicator provide new cues. The euro's February downward tendency is still intact. The common currency last sold at 1.3007 USD. Supports are seen at 1.30 USD, at 1.2965 USD, at 1.2935 USD and at 1.2910 USD. Resistances are seen at 1.3040 USD, at 1.31 USD, at 1.3125 USD and at 1.3165 USD.
U.S.
The market has not really reacted to U.S. spending cuts yet this morning. Merely crude futures, Brent and WTi, are trading with a soft tendency while G.Oil is holding relatively steady near Friday’s closing price. The traded volume at NYMEX is clearly above average for this time of day. Traders are waiting for the European markets to open, for signals from forex trading and for economic data to be released in the course of the day.
Houston (ex-wharf indications 04-03)
380cst $613
180cst $728
MGO $1007
Very tight avails for 180 cst
New Orleans (ex-wharf indications 04-03)
380cst $612
180cst $713
MGO $1006
Singapore (correct as of 1430hrs LT - delivered indications)
The Singapore fuel oil market fell by more than -$4.0 during the morning Platts window last Friday. Market fundamentals continue to weigh on ample supply. The delivered bunker premiums were ranging between $5.0 to $7.5 above cargo prices. Bunker fuel oil swaps lost more than $9/mt at the front of the forward curve both for Singapore and Rotterdam papers. Backend was slightly stronger with cal 2014 papers assessed app. $7/mt down versus previous days close. This morning both markets are trading higher.
High premiums for prompt deliveries.
380 cst $625
180 cst $628
MGO $930
Fujairah (delivered indications 04-03)
380cst $630
180cst $680
MGO $1030
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 : $ 603
(1.0 %) :$ 635
180cst: $ 633
(1.0 %):$ 665
MGO 0.1%S: $ 906
