The price of crude oil fell under $93 per barrel on the New York Mercantile Exchange Monday while natural gas prices jumped. Traders were still reacting to supply reports from last week and an extended winter chill in much of the country. West Texas Intermediate crude oil for April delivery gave up $1.02 to reach $92.43 Monday morning. Gasoline shed 3.82 cents to $3.1218 per gallon. Home heating oil added lost 2.96 cents to settle at $2.9104 a gallon.
The oil market was slightly edging higher Friday morning before first resistances were breached towards noon. Given that the dollar lost ground vs. other currencies, e.g. the euro, the development at the forex market had driven up oil prices yet again. This was largely due to the mixed economic indicators out of the USA, with inflation data especially weighing on the greenback. Consumer price inflation rose by over 2.0%. This leaves the U.S. Fed with more leeway for their loose monetary policy. The softer dollar then encouraged traders to engage in long positions since oil futures became cheaper for holders of other currencies. Supported by the slightly bullish technical constellation, oil prices reached their day’s highs in the early afternoon. But in further trading, the oil market’s upside fizzled out and oil futures consolidated at a relatively high level. Market players had been cautious prior to the outcome of the EU summit in Brussels that would point the way ahead for further investments as any decision would affect the euro/dollar parity in to some extent. Early on Monday, traders reacted to the agreed measures by taking profits with the euro, which partly carries over to the oil market. Due to profit-taking, oil prices at ICE and NYMEX had already fallen back to Friday’s lows last night.
The surprise decision by euro zone leaders to part-fund a bailout of Cyprus by taxing bank deposits sent shockwaves through financial markets on Monday, with shares and the bonds of struggling euro zone governments tumbling. The bloc struck a deal on Saturday to hand Cyprus rescue loans worth 10 billion euros ($13 billion), but defied warnings - including from the European Central Bank - and imposed a levy that would see those with cash in the island's banks lose between 6.75 and 9.9 percent of their money. Parliament in Cyprus put off a vote on the measure - which has shaken depositors' confidence in banks across the continent - until Tuesday, however, and with public anger at the deal widespread the government said it was already looking to ease the pain for small savers. Without the rescue, Cyprus would have be unable to avoid a default. That would have undermined the promise that Greece's debt writedown last year was a one-off, but the unprecedented move to hit depositors adds a radical new dimension to the crisis across the euro zone.
ICE Gasoil contract for April delivery settled at 918.00 USD on Friday. This was 8.25 USD above Thursday's settlement. With some 53,400 deals the traded volume was about average.
The Stochastic’s lines have converged at ICE charts and thus, are no longer bullish. But as long as its lines are not crossing, no selling signal will be triggered. In contrast, the Stochastic oscillator at the WTI chart has already turned bearish. Moreover, the RSI is touching the 70%-line and would also trigger a selling singles if this line was breached. However, we will focus on ICE charts today and are thus assuming a rather neutral stance, the more so as traders are oriented towards the euro/dollar parity. But the technical constellation could turn bearish again if G.Oil and Brent breached their year’s lows, reached last week, at 905.50 USD and 107.65 USD, respectively.
U.S.
Nymex bearish: The softer euro and the slipping Asian stock markets (Nikkei225) considerably drive down the oil market this morning. Obviously the decisions made at the EU summit discouraged investors to engage in risk positions. The traded volume at NYMEX is far above average for this time of day. Traders are waiting for the European markets to open, for the decision to be taken by the Cypriot parliament, for signals from forex trading and for the upcoming economic data.
Houston (ex-wharf indications 18-03)
380cst $621
180cst $658
MGO $1013
New Orleans (ex-wharf indications 18-03)
380cst $622
180cst $666
MGO $1010
Singapore (correct as of 1430hrs LT - delivered indications)
WTI is going downwards, with -$0.65. Paper for Mar is going downwards with 180cst -1.95 and for 380cst -$1.75, and Apr contracts with 180cst -$1.95, 380st -$1.75. The cargo market is up on 180cst +$7.34, and 380cst gained +$4.34 and MGO -$0.24.
The Singapore fuel oil market rebounded last Friday during the morning Platts window, up more than +$4.0. The Asian Fuel Oil crack is getting narrower as supply is getting tighter with lower incoming cargoes. The delivered bunker premiums were lower, ranging between $1.5 to $4.5 above cargo prices. Bunker fuel oil swaps gained up to $9.5/mt at the front of the forward curve both for Singapore papers. Backend was slightly weaker, with cal 2014 papers gaining app.$6/mt. This morning the markets are trading down.
High premiums for prompt deliveries.
380 cst $627
180 cst $636
MGO $915
Fujairah (delivered indications 15-03)
380cst $642
180cst $690
MGO $1020
ARA (Amsterdam - Rotterdam - Antwerp)
Still delays reported at some terminals in Rotterdam. However due to the lack of demand in ARA in generally, we do not expect any problems on prompt deliveries, even though a higher premum is requested.
Indications for delivered bunkers:
4380cst : $ 603
(1.0 %) :$ 617
180cst: $ 633
(1.0 %):$ 657
MGO 0.1%S: $ 897
