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Brent crude slipped from a two-week high on Thursday as the threat of a disruption in supplies from the Middle East eased after Egypt's armed forces toppled the country's president to force a resolution to a political crisis there. Egypt has been facing mass demonstrations since June 30 by opposition calling for the resignation of Islamist President Mohamed Morsi and his supporters. But the Suez Canal, a key waterway for oil shipments and vital to Egypt's struggling economy, has been unaffected by the uprising. Brent crude fell 41 cents to $105.35 a barrel by 06:44 GMT, after settling at its highest since June 19 on Wednesday. U.S. crude edged down 17 cents to $101.07, coming off a 14-month peak of $102.18 hit in the prior session.

Oil markets in London and New York had started with a firm tendency early Wednesday, supported by fundamentals. One driver was the difficult situation in Egypt where president Mursi had announced to stay in office and to not give in to the ultimatum issued by the military forces. Adding to this was the strong drop in U.S. oil inventories reported by the API the night before, which were to be confirmed later by the DoE. But in the early afternoon, market players had initially focused on U.S. job market data. Weekly jobless claims came out better than expected and further boosted oil prices. At 4.30 p.m., the DoE then released its weekly inventory data, showing a massive draw in crude and products. The decline exceeded analysts’ expectations and also the API’s forecast by far. Consequently, oil futures surged in the late afternoon to consolidate below their strong resistances at 106.00 USD (Brent) and at 904.75 USD (G.Oil) little later. WTI was trading below its resistance at 102.20 USD throughout the day and did not react as strongly to the DoE report because, on the one hand, crude stockpiles in Cushing slightly rose, contrary to the general trend; and on the other hand, WTI had traded stronger than its European counterpart the previous days. Thus, the American crude saw some profit-taking from long positions yesterday. In the late evening, the Egyptian military – as expected – deprived president Mursi of his power, hoping to calm down the wrought-up crowd in Egypt. This fundamentally bullish factor pushed WTI up to its day’s high at 102.18 USD, its highest level since Mai 2012. G.Oil reached a three-month high at 905.50 USD.

ICE Gasoil contract for July delivery settled at 903.25 USD on Wednesday. This was 23.50 USD above Tuesday's settlement. With some 29,900 deals the traded volume was clearly below average.

So far there are no fresh signals from the technical analysis. The Stochastic’s lines are converging again and would give off a selling signal if they crossed. This would result in a downward correction. The RSI as well as the stochastic oscillator are also indicating an overbought market situation which favours technical sellings. But as long as the Stochastic’s lines do not cross and the RSI stays above the 70%-line, we assume a neutral stance regarding the technical constellation.

U.S.

Nymex bullish: Early this morning, traders have been taking first profits following the price rally of the past days. These have remained, however, limited so far. The traded volume at NYMEX is slightly below average for this time of day. Market players are now closely watching the performance of European markets, new cues from forex trading and for only a few economic data to be released in the course of the day.

Houston (ex-wharf indications 03-07 )
380cst $586
180cst $640
MGO $975

New Orleans (ex-wharf indications 03-07)
380cst $632
180cst $642
MGO $977

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

Crude is neutral with -$0.16. The paper market is bullish with Jul 180cst +$6.30 and for 380cst +$7.25, and Aug contracts with 180cst +$5.75, 380st +$4.50. The cargo market is not yet responding, losing with 180cst -$5.39, and 380cst -$0.06 and MGO +$1.49.

The Singapore fuel oil values saw stronger selling reflecting the weak fundamentals. The Asian fuel oil cracks widen quite significantly. The delivered bunker premium saw a range of +$7 to +$12 above cargo prices. This morning markets are trading slightly higher.

380cst $592
180cst $600
MGO $900

Fujairah (delivered indications 4-07)

380cst $598
180cst $677
MGO $1040

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $584
(1.0 %) :$614
180cst: $614
(1.0 %):$ 644
MGO 0.1%S: $ 879