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The price of oil fell to near $93 a barrel on Thursday after a survey showed manufacturing activity in China falling to its lowest level in seven months, a sign that the recovery in the world’s No. 2 economy is fading. By early afternoon in Europe, benchmark oil for July delivery was down 99 cents to $93.29 a barrel in electronic trading on the New York Mercantile Exchange. The contract declined $1.90 to close at $94.28 a barrel on Wednesday.

Financial markets saw an eventful day in the USA yesterday (DoE, Bernanke, FOMC). Trade volume was very high and oil markets in London and New York displayed great volatility. In the end, the bearish tendency dominated, however. Oil futures had already declined in the morning, breaching first short-term supports. The bearish API report released late Tuesday and the bearish technical constellation favoured profit taking at this point. But market players were focusing on afternoon events. Thus, downward potential had initially been limited as traders were liquidating their risk positions, causing a slight counter-reaction time and again. When the Fed Chairman Ben Bernanke took the floor at 4.00 p.m., he did not give any hints at a speedy end to the expansive monetary policy at first and oil prices were trading up just before the DoE data were released at 4.30 p.m. However, it only was a short rise and with the release of U.S. oil inventories, selling pressure increased again. Thus, oil futures renewedly tested their supports at 102.75 USD (Brent) and at 862.00 USD (G.Oil). But they were only sustainably breached at the release of the FOMC minutes and then settled at new day’s lows.

ICE Gasoil contract for June delivery settled at 866.75 USD on Wednesday. This was 9.00 USD below Tuesday's settlement. With some 84,000 deals the traded volume was above average.

The Stochastic oscillator remains bearish at ICE and NYMEX charts this morning. Yesterday’s price slump has reduced the selling pressure at the oil market. Thus, the technical constellation is not as bearish anymore but still favours some profit taking; the more so as neither the RSI nor the Stochastic indicate an oversold market situation. But strong supports still limit more downward potential.

U.S.

Nymex bearish: Oil futures started weaker Thursday due to the slightly bearish technical constellation, the weaker euro vs. the dollar, declining Asian stock markets and a disappointing Chinese HSBC PMI. The traded volume at NYMEX is slightly above average for this time of day. Market players are now closely watching the performance of European markets, new cues from forex trading and a series of economic data to be released in the USA and Europe.

API: Crude oil + 0,5 ; distillates +0,5 ; gasoline + 3,0 million barrels vs previous week
DOE: Crude oil - 0,3 ; distillates -1,1 ; gasoline + 3,0 million barrels vs previous week
Survey: Crude oil + 0,0 ; distillates -0,3 ; gasoline -0,1 million barrels vs previous week

Houston (ex-wharf indications 22-05 )
380cst $579
180cst $644
MGO $963

New Orleans (ex-wharf indications 22-05)
380cst $587
180cst $652
MGO $965

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

Crude is down with -$2.96. The paper market is following, dropping with June 180cst -$7.35 and for 380cst -$7.00, and July contracts with 180cst -$8.20, 380st -$7.00. The cargo market is down, with 180cst -$2.62, and 380cst -$4.02 and MGO -$1.46.

The Singapore fuel oil market extended its loss by -$4.0 to -$2.0 yesterday. The market demand remained soft as strong incoming cargo continued to weigh on fundamentals. The delivered bunker premiums were around +$5.5 above cargoes prices yesterday. Singapore market will be closed tomorrow for public holiday and will reopen on the coming Monday. This morning the markets are trading down.

High premiums for prompt deliveries.
380 cst $599
180 cst $608
MGO $870

Fujairah (delivered indications 22-05)

380cst $606
180cst $673
MGO $1000

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $589
(1.0 %) :$ 615
180cst: $ 621
(1.0 %):$ 645
MGO 0.1%S: $ 848