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Although oil prices had still been edging lower in Asian trading early this morning, pressured by the declining euro, they have climbed up to their resistances after the opening of European markets. As stock markets have been performing slightly better and strong supports have formed at 104.50 USD (Brent) and at 96.45 USD (WTI), the oil market is well supported towards noon. These strong supports also underpin the slightly bullish technical constellation (Stochastic). Meanwhile, WTI and G.Oil have approached their second resistance while Brent tested its first. Market players now wait for some U.S. data to be released in the course of the afternoon.

Much like the days before, oil futures had initially been trading sideways in a relatively narrow range during electronic trading Thursday morning. Traders still had to digest the negative news on oil demand communicated in the great energy agencies’ oil reports. Later that morning, crude futures even fell below their first support, the more so as the negative growth forecast released by the World Bank added to the bearish market factors and further dampened investors’ mood. But as the breach was not sustainable, oil prices strongly rose at the opening of U.S. markets when positive economic indicators on the U.S. job market and retail sales raised traders’ hopes for a pick-up in oil demand. Oil markets continued their upturn supported by the slipping dollar vs. the euro and the strong performance of American stock markets – the S&P index increased by 1.2% after the release of positive company figures. This lifted investors’ mood, of course. After first resistances had been breached then, technical selling accelerated oil’s surge. In the end, oil futures settled near their day’s highs, with WTI even closing at a 3-week-high.

ICE Gasoil contract for July delivery settled at 879.00 USD on Thursday. This was 6.00 USD above Wednesday's settlement. With some 122,000 deals the traded volume was clearly above average.

The Stochastic’s lines had crossed Thursday in the overbought zone at the G.Oil and WTI chart and thus the indicator gave off a buying signal. At the same time, the RSI also moved in the overbought zone, targeting the 70%-line below. If the indicator fell below this line, it would generate a selling signal. Moreover, the Stochastic could trigger another buying signal at the Brent chart as its lines are converging now. WTI had already approached its medium-term resistance line at 96.60 USD yesterday and G.Oil even breached its at 886.00 USD. However, oil’s surge yesterday may have used up much of the bullish potential. Consequently, the technical analysis points in a neutral to bullish direction. Still, given yesterday’s massive advance, we expect to see some profit-taking at first.

U.S.

Nymex bearish: After yet another rally during U.S. trade yesterday, oil prices are consolidating in a narrow range again this morning. Although traders’ sentiment at Asian stock markets is bullish, the rising dollar counter that effect somewhat.

The traded volume at NYMEX is below average for this time of day. Market players are now closely watching the performance of European markets, new cues from forex trading and a string of economic data to be released in the course of the day, with particular focus on U.S. industrial production and the consumer price index for the euro zone.

Houston (ex-wharf indications 13-06 )
380cst $586
180cst $648
MGO $973

New Orleans (ex-wharf indications 13-06)
380cst $591
180cst $639
MGO $973

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

Crude is surging with +$1.72. The paper market is gaining still, but slowing with June 180cst +$2.00 and for 380cst +$4.25, and July contracts with 180cst +$3.95, 380st +$5.55. The cargo market is more bullish with 180cst +$4.95, and 380cst +$5.16 and MGO +$0.64.

The Singapore fuel oil markets rose yesterday up around +$5.0 during the Platts window yesterday. Market is continued to be supported on the window while fundamentals remain weak weighed down by sluggish bunker demand. The delivered bunker premiums dipped to around +$3.5 above cargoes prices yesterday as demand was muted due to higher outright prices. This morning both markets are trading up.

380cst $607
180cst $628
MGO $900

Fujairah (delivered indications 14-06)

380cst $615
180cst $695
MGO $1040

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $586
(1.0 %) :$ 615
180cst: $ 614
(1.0 %):$ 642
MGO 0.1%S: $ 879