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Given that yesterday’s surge was rather driven by hopes for a continuation of the Fed’s bond purchases than by actual fundamental facts, market players have still been seeking direction this morning and adopted a wait-and-see attitude as guiding signals have been lacking so far. As a result, oil futures at ICE and NYMEX have been consolidating at a high level in a narrow range and hold steady in between their resistances and supports. Trade can be expected to remain rather muted in the afternoon since there is hardly any economic data to be released today. If the U.S. trade balance deficit comes out higher than forecast (-41.0 billion USD), it may pressure the dollar and boost oil prices. Apart from this, traders are already eying this week’s official U.S. job market statistics which will be released on Friday. Meanwhile, the Iranian spiritual leader, Ayatollah Ali Khamenei warned all presidential candidates of making any concessions to the West after the election victory on July 14. Khamenei has the final word with all important decisions, including Iran’s nuclear program.

Oil markets started muted this week. But given Friday’s heavy price slump and a very disappointing Chinese HSBC PMI, market players had still been seeking direction early on Monday. When oil futures vainly tested their first resistance, they bounced off and fell back to their first support at ICE. WTI marked its month’s low at 91.26 USD and Brent again slid below 100 USD, hitting its support at 99.75 USD. But as this marker proved to be strong, the rebound provided some technical momentum. In addition, positive data released in the euro zone helped the oil market advance, not least because they raised traders’ hopes for a pick-up in demand. However, analysts merely see yesterday’s surge as a technical reaction since the RSI had breached the 30%-line at all charts, triggering a buying signal as we had already expected in our morning news. After the release of a worse-than-expected ISM PMI, oil prices continued their upturn, breaching more resistance lines. The index surprisingly fell to 49.0 points which signals that the U.S. manufacturing activity is contracting and thus, that oil demand in this sector is declining. Moreover, the bad data increased the likelihood that the FED will keep up its bond buying program, whereas rather positive figures released last week had initially stoked hopes, or fears, of a swift reduction of expansive measures.

ICE Gasoil contract for June delivery settled at 854.25 USD on Monday. This was 9.50 USD above Friday's settlement. With some 52,000 deals, the traded volume was about average.

After the RSI has breached the 30%-line at all ICE and NYMEX charts yesterday, the technical view is rather bullish this morning. The Stochastic’s lines are touching at all charts and thus the indicator still is neutral. If its lines crossed in the course of the day, another buying signal would be triggered, see also technical analysis. But as long as the stochastic oscillator is not giving off a signal, we consider the technical constellation as neutral to bullish, the more so as the bulk of the RSI’s bullish potential might have been used up during yesterday’s steep rise.

U.S.

Nymex bullish: Trade volume at NYMEX is slightly below average for this time of day. Investors are now waiting for the European markets to open, for fresh signals from forex trading as well as for a few economic indicators to be released in the course of the day. Markets will particularly focus today’s and tomorrow’s data on U.S. oil inventories.

Houston (ex-wharf indications 3-06 )
380cst $578
180cst $641
MGO $950

New Orleans (ex-wharf indications 3-06)
380cst $583
180cst $618
MGO $952

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

Crude is bouncing back up with +$1.12. The paper market is gaining bullish momentum as well with June 180cst +$4.00 and for 380cst +$3.05, and July contracts with 180cst +$4.50, 380st +$4.55. The cargo market is slowing with 180cst -$0.03, and 380cst -$4.27 and MGO -$1.75.

The Singapore fuel oil markets lost between -$4.25 to flat during the Asian Platts window on the start of a new trading month. The market saw a strong support in the 180cst demand which lifted values above the 380cst. With the strong incoming amount of products, market is still expected to see ample supply amidst a softer bunker demand outlook. The delivered bunker premiums lifted to around +$9.0 above cargoes prices pulled higher by terminal congestion. This morning markets are trading slightly lower.

380cst $595
180cst $610
MGO $860

Fujairah (delivered indications 04-06)

380cst $603
180cst $678
MGO $1005

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $578
(1.0 %) :$ 608
180cst: $ 610
(1.0 %):$ 636
MGO 0.1%S: $ 845