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Oil futures had extended their gains during morning trade Thursday morning after rising late yesterday. Brent and WTI have both breached their first resistance at 103.35 USD and at 97.50 USD, respectively. Brent’s strong marker limited the upward potential, however. At the opening of European market, oil futures were also propped by the gains at European stock markets. In addition, the comments made by Fed officials still have some effect today as they again stoked investors’ hopes that the Fed will take some more time before withdrawing economic stimulus. Moreover, the technical constellation still is slightly bullish but is gradually losing its influence. As traders shift positions prior to the expiration of NYMEX gasoline and heating oil contracts, these become more volatile. Before the end of the week, which is also the end of the month and the second quarter, market players may remain cautious. As a result, oil prices have dropped back into their technical trading range towards noon. In the afternoon, the Chicago PMI and consumer confidence communicated by Michigan University might provide some fresh signals.

In sluggish trade Thursday morning, oil futures were trading mostly sideways within their trading range. Several tests to breach their first resistance failed. Upward potential had been rather weak despite the bullish technical constellation. Only after the opening of U.S. markets did oil prices advance, helped by better-than-expected U.S. economic indicators that boosted stock markets and weakened the dollar. Appeasing comments by William Dudley, president of the New York Fed, who denied an early exit from the Fed’s expansive monetary policy, only from the bond buyings, added to the bullish potential at the oil market. According to Dudley, recent market expectations for an earlier rate rise are “quite out of sync” with the statements and expectations of the Fed. Moreover, comments by the EIA, revising up U.S. gasoline consumption in April, as well as news on yet another shut-down of the Kirkuk-Ceyhan pipeline also supported the price level yesterday. After oil futures breached their the first, the bullish technical analysis finally had an effect. Technical buying orders then accelerated the upward movement. But it was mostly the positive sentiment at stock markets - thanks to hopes for a continuation of the Fed measures - that helped oil markets close with considerable gains.

ICE Gasoil contract for July delivery settled at 882.75 USD on Thursday. This was 19.00 USD above Wednesday's settlement. With some 44,000 deals the traded volume was slightly below average.

The Stochastic indicator is still bullish this morning after buying signals have been triggered at ICE and NYMEX charts this week. However, the indicator is gradually losing its influence and approaches the overbought zone. The RSI is neutral at all charts and does not indicate an oversold market situation at the Brent chart anymore. Thus, the technical constellation only is slightly bullish this morning, the more so as the bulk of the bullish potential has been used up during the past days given oil’s surge. Consequently, we agree with analysts’ view that oil prices may consolidate today. If they rose above yesterday’s highs, new buying signals would be triggered.

U.S.

Nymex bullish: After slightly slipping during Asian trading at night, oil futures at ICE and NYMEX have continued yesterday’s upturn. The softer dollar and the good performance of Asian stock markets (Nikkei 225), which are benefiting from rising stocks at Wall Street, provide some bullish momentum at the oil market this morning. The traded volume at NYMEX is far above average for this time of day. Market players are now closely watching the performance of European markets, new cues from forex trading and for some economic data to be released in Germany and the USA in the course of the day.

Houston (ex-wharf indications 27-06 )
380cst $570
180cst $612
MGO $966

New Orleans (ex-wharf indications 27-06)
380cst $574
180cst $635
MGO $968

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

Crude is bullish with +$1.76. The paper market is slowly gaining with Jul 180cst +$2.00 and for 380cst +$4.70, and Aug contracts with 180cst +$3.50, 380st +$4.70. The cargo market is mixed, with 180cst -$10.71, and 380cst -$2.17 and MGO +$0.79.

The Singapore fuel oil markets fell between -$10.0 to -$2.0 during the Asian Platts window yesterday. The big difference in the fall was mainly due to the lack of support for the 180cst cargo after nearly one month of bull play. The delivered bunker premiums were around $7.25 above cargoes prices. This morning markets are trading flat.

380cst $588
180cst $598
MGO $885

Fujairah (delivered indications 28-06)

380cst $596
180cst $675
MGO $1025

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $570
(1.0 %) :$ 600
180cst: $602
(1.0 %):$ 627
MGO 0.1%S: $ 865