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After narrowing down to close to the 33-month low level of 1.19 a barrel, the spread between brent crude and West Texas Intermediate (WTI) recovered a bit on Thursday. Despite comparable quality of both forms of energy oil brent was selling for about 20-25% more than WTI a few years ago. Spread between brent crude and WTI indicates the price quote at a premium to the former over the latter. the spread went as high as $29.70 a barrel in September 2011 when brent crude oil was $109.96 a barrel as compared to $80.26 a barrel of WTI . Currently, brent crude is quoted at $107.37 a barrel as compared to $104.91 a barrel of WTI.

Oil prices at ICE and NYMEX continued rising in early Thursday morning trading marking (yesterday's) highs soon. However, they lost some ground in the course of the morning falling to their first supports as the dollar made some headway. News on oil exports from Libya and Irak being resumed at full scale this week have also slightly weighed on oil markets. In the first hours of US-trading, oil futures consolidated as markets lacked direction. It seemed as though traders needed to digest the sharp rise following the Fed's decisions. Some market participants meanwhile have said that this rise was exaggerated. Consequently, investors took more profits after the weaker than expected weekly data on the US labor market. After the break of several important supports technically generated selling orders accelerated the price decline. The WTI contract lost even more ground at night on news that the Seawaypipeline had renewedly been shut. Thus, oil futures at ICE and at NYMEX settled with losses yesterday.

ICE Gasoil contract for August delivery settled at 909,50 USD on Thursday. This was -2.25 USD compared to Wednesday's settlement. With some 98,400 deals the traded volume was above average.

The stochastic indicator gave a bearish signal at all charts yesterday after its lines had crossed in overbought territory. This generated more downward potential. The RSI doesn't give any cues yet but still indicates that markets are considerably overbought. There will be renewed selling pressure at oil markets only if oil futures fall below yesterday's lows. If the RSI falls below the 70%, futures are likely to slide even further down. Since with yesterday's price slump some of the downward potential has already been spent, we assess the technical situation as neutral to bearish this morning.

U.S.

Nymex neutral: After yesterday's losses, oil futures have regained some ground this morning on technical buying. There are no new fundamental news. The steady euro, which is able to hold above 1.31 USD, and gaining Asian equities provide some momentum, too. The traded volume at NYMEX is slightly below average for this time of day. Market players are now looking ahead to the performance of European markets, new clues from forex trading and some economic indicators.

Houston (ex-wharf indications 11-07 )
380cst $600
180cst $674
MGO $997

New Orleans (ex-wharf indications 11-07)
380cst $599
180cst $631
MGO $998

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

Crude is bearish with -$2.23. The paper market is bearish, with Jul 180cst -$5.00 and for 380cst -$4.80, and Aug contracts with 180cst -$4.85, 380st -$4.25. The cargo market is bullish, with 180cst +$7.43, and 380cst +$6.97 and MGO +$0.35.

The Singapore fuel oil market gained between +$7.0 to +$7.5 during the Asian Platts window yesterday. The latest Singapore heavy residual inventory reported a marginal draw of -0.14mmbl to 19.80mbbl. The delivered bunker premiums were estimated around +$6.0 above cargo prices. This morning the markets are trading a few dollars down.

380cst $596
180cst $603
MGO $910

Fujairah (delivered indications 12-07)

380cst $602
180cst $679
MGO $1050

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $601
(1.0 %) :$610
180cst: $631
(1.0 %):$ 640
MGO 0.1%S: $ 884