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The slight downward correction that set in this morning was rather short-lived. After G.Oil failed to sustainably breach its support at 926.50 USD, oil futures were able to recoup initial losses. At the opening of European trade, oil markets still drew bearish signals from the API’s monthly statistics which had been released last night. According to the private institute, U.S. oil demand fell to a 16-year low in June (18.727 mbpd) whereas the country’s production reached its highest level in 22 years (7.221 mbpd). Adding to the pressure were the losses at European stock markets as well as the weaker euro and news on higher oil production in China (June). As a result, crude futures at ICE and NYMEX dropped below their second supports. However, G.Oil’s strong second support stopped the downturn at the oil market towards noon. Propped up by the slightly bullish technical constellation, declining stockpiles in the USA and a positive outlook for the U.S. economy, oil prices managed to climb up to their first resistance again. As there are no important economic indicators on the agenda today, market players will focus on the G20 summit in Moscow this afternoon and also on the performance of U.S. markets.

The National Bureau of Statistics in China stated, the country produced 17.443 million metric tons of crude in June, that’s about 4.26 million barrel/day. This is an increase by 7.1% compared to last year. Moreover, China produced 13.962 million metric tons (+3.4%) while gasoline production rose to 8.036 million metric tons (+15.3%).

Given that oil prices had surged in the first half of the week, they were trading rather rangebound Thursday morning. Merely ICE Brent shortly fell below its first support towards noon but then bounced off its key support at 108.10 USD and returned into its trading range. As fundamental news remained thin and the technical analysis did also not provide any guiding signals, traders were cautious to place new positions. Only after the release of very positive figures on U.S. initial jobless claims did oil markets receive momentum. The upturn was then accelerated by a convincing Philly Fed manufacturing index which serves as further prove for the relative soundness of the U.S. economy as well as for increasing oil demand. In the wake of record gains at Wall Street, WTI rose to a 16-month high and thus is now as expensive as its European pendant. What is more, Ben Bernanke’s speech before banking committee of the U.S. Senate did not provide any new insights in into the Fed’s monetary policy plans.

ICE Gasoil contract for August delivery settled at 928.75 USD on Thursday. This was 5.00 USD above Wednesday's settlement. With some 55,600 deals the traded volume was about average.

The Stochastic oscillator gave off a buying signal at the Brent and WTI chart yesterday as its both lines had crossed in the overbought zone. The indicators is still neutral for G.Oil , however, and it seems rather unlikely that the 70%-line can be breached. The steep, short-term uptrend channels remain intact. Due to the strongly overbought market situation, we consider the technical constellation as neutral to bullish this morning.

U.S.

Nymex bullish: After reaching new highs on Thursday, oil prices have been taking a breather in Asian trading this morning.
The traded volume at NYMEX is far below average for this time of day as the front month expires on Monday and traders are already shifting their positions to September. Market players are now waiting for European markets to open, for new clues from forex trading and for the G20 summit of financial ministers to take place in Moscow today. As there are no crucial economic indicators on the agenda today, investors refrain from engaging in new positions ahead of the weekend.

Houston (ex-wharf indications 19-07 )
380cst $594
180cst $626
MGO $1024

New Orleans (ex-wharf indications 19-07)
380cst $595
180cst $627
MGO $1000

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

Crude is surching still with +$1.39. The paper market is turning slightly again, losing with Aug 180cst -$0.50 and for 380cst -$0.50, and Sept contracts with 180cst -$0.45, 380st -$0.75. The cargo market is starting to react to crude gaining with 180cst +$5.91, and 380cst +$7.00 and MGO +$1.23.

The Singapore fuel oil market rose more than $6.0 during the Asian Platts window. The latest Singapore heavy residual inventory reported a similar marginal draw of -0.88 mbbl to 18.92mbbl as previously. The delivered bunker premiums were around +$5.0 above cargo prices yesterday. This morning markets are trading slightly lower.

380cst $607
180cst $610
MGO $920

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $607
(1.0 %) :$612
180cst: $615
(1.0 %):$ 646
MGO 0.1%S: $ 910