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Oil futures at ICE and NYMEX had considerably advanced during Thursday morning trade, testing their upward potential. Positive indicators released in the euro zone and the strong performance of European stock markets had driven up the oil market before traders took profits in the afternoon. The downturn was also favoured by the bearish technical constellation and declining U.S. stock markets which fell back into the red. Besides, there were news regarding Libyan oil exports according to which an export terminal had reopened and thus, oil is being shipped again. In the late evening, oil prices then consolidated close to their day’s lows. When the EIA released its monthly energy report and the API the weekly oil inventory data outside our office hours, it hardly made an impact at the oil market and so oil futures at ICE and NYMEX settled near their day’s lows. The Stochastic oscillator remains bearish after giving off a selling signal yesterday whereas the RSI is still neutral. The Stochastic’s lines are further diverging and thus the technical constellation can be considered as bearish. This may favour that oil prices test yesterday’s lows. If these were sustainably breached, selling pressure would increase, triggering more profit-taking.

ICE Gasoil contract for August delivery settled at 909.25 USD on Tuesday. This was 11.00 USD below Monday's settlement. With some 34,200 deals the traded volume was below average.

EIA monthly energy report
The EIA has slightly lowered its forecast for global oil consumption in 2013 and 2014. However, the agency revised up its prognosis for the USA and China, the world’s biggest consumers. In June, OPEC production is said to have fallen to the lowest level since October 2011. Given the increasing production of non-OPEC countries and slightly lower global oil demand outlook, the EIA revised down its demand forecast for OPEC oil. The cartel itself, however, continues to ramp up its production in order to increase reserve capacities from currently 2.7 mbpd to about 3.6 mbpd by the end of the year. The most important figures in detail:

•Global oil consumption 2013: 89.99 mbpd (-0.06 mbpd vs. previous estimate)
•Global oil consumption in 2014: 91.21 mbpd (-0.08 mbpd vs. previous estimate)

•U.S. oil consumption in 2013: 18.69 mbpd (+0.03 mbpd vs. previous estimate)
•U.S. oil consumption in 2014: 18.70 mbpd (+0.01 mbpd vs. previous estimate)

•China’s oil consumption in 2013: 10.70 mbpd; +0.42 mbpd (+0.12 vs. previous estimate)
•China’s oil consumption in 2013: 11.14 mbpd; 0.44 mbpd (+0.13 mbpd vs. previous estimate)

•OPEC production in June 2013: 30.02 mbpd (-0.22 mbpd vs. previous estimate)
•OPEC production in July 2013: 29.96 mbpd (lowest output since October 2011)
•OPEC production forecast Aug. 2013: 30.13 mbpd
•OPEC production forecast 2013: 30.03 mbpd (-0.15 vs. previous estimate)
•OPEC production 2014: 29.79 mbpd
•OPEC production capacities in July 2013: 32.66 mbpd (+0.26 mbpd vs. previous month
•OPEC reserve capacities in July 2013: 2.70 mbpd (+0.50 mbpd vs. previous month)

•WTI price forecast Q3 2013: 102.22 USD (vs. previous estimate of 95.50 USD)
•WTI price forecast Q4 2013: 97.17 USD
•WTI price forecast 2013: 96.96 USD (vs. previous estimate of 94.65 USD)
•WTI price forecast 2014: 92.96 USD

•Brent price forecast Q3 2013: 105.98 USD (vs. previous estimate of 101.50 USD)
•Brent price forecast Q4 2013: 102.17 USD
•Brent price forecast 2013: 105.80 USD (vs. previous estimate of 104.68 USD)
•Brent price forecast 2014: 99.75 USD

The Enviromental Protection Agency (EPA) has announced to propose a reduction of the annual quota of bio fuels (like Ethanol extracted from corn) in gasoline in the USA next year. In the USA, the industry is obliged to add a fixed amount of renewable fuels to the offered gasoline. Since gasoline demand is sinking, the percentage of renewable fuels in gasoline increased and so refineries are unable to sell the product adequately on US markets.

Consequently, US oil companies increasingly exported gasoline with the higher percentage of bio fuels. If the annual quota is cut or created in a more flexible way, it is generally expected that refineries will export less fuels again. Analysts expect that gasoline demand will slightly decrease in this case weighing on oil prices.

The EIA's monthly energy report can be regarded as bearish, as total demand figures have been downwardly revised and the demand for OPEC crude oil is also continuing to decline. Even though the price forecasts for Brent and WTI for the third quarter have been upwardly revised, they are still below current price levels. The IEA's and the OPEC's monthly energy reports are due on Friday.

The restart of production at the Buzzard oil field (yesterday) might have eased supply worries slightly. Maintenance work at the Forties pipeline system are obviously concluded. News regarding Libya, where an agreement with workers in the oil industry is being sought are also easing worries of supply bottlenecks. The situation in Egypt seems to shift in to the background. Fed member Evans does not exclude tapering to start in September. The shared currency was able to hold steady near the 1.33 USD marker earlier this morning, despite the comments uttered by the Chicago Fed chairman Charles Evans Monday night. Asked whether the Fed might announce the tapering of bond buying after its next meeting in September, he answered that he did not want to exclude this possibility. Evans belongs to those members of the Fed, who in the past had defended the US central bank's ultra-accommodative monetary policy. Even though he was surprised by the recent hike in mortgage interest rates, Evans saw structural progress in the US economy. Mr Evans said he expected the US economy to grow by some 2.5% in the second half of 2013, while in 2014 growth should amount to some 3.0%. He also expects the unemployment rate to renewedly drop by the end of the year - to 7.2% or 7.3% (currently: 7.4%). By mid 2014, an unemployment rate of 7.0% is to be reached, the rate that was named by Ben Bernanke earlier this year as a target for starting with the tapering of bond buying. However, this has not lead to any stronger reactions on the forex market so far. The euro is still slightly bolstered by yesterday's surprisingly good economic data out of the euro zone. After Evan's remarks, Nomura Securities analyst Junichi Wako sees a 60% possibility for a tapering of bond buying in September. If there is more evidence for this coming up and if more analysts agree, the euro might likely see a downward correction, resp. the dollar might see an upward correction. Technically, the euro is still slightly supported by the buying signal that was provided by the stochastic indicator. Currently, the euro changes hands at 1.3279 USD, testing its first support. Resistances are at 1,3315 USD, at 1,3325 USD, at 1,3335 USD, at 1,3345 USD and at 1,3350 USD. Supports are at 1,3285 USD, at 1,3265 USD, at 1,3245 USD and at 1,3235 USD.

U.S.

Nymex bearish: According to the API's weekly inventory data, U.S. crude oil and gasoline stocks declined stronger than expected while distillate reserves showed a surprisingly high increase. Refineries reported higher production capacities in the week ended on July 26. The API's figures in detail:

Regarding the drop in crude stockpiles, the strongest decline was reported in Cushing. The improved infrastructure seems to facilitate supplies to U.S. refineries from this region where oil has piled up for months. For the past four weeks, however, crude reserves in WTI’s reference stock. Consequently, the Brent/WTI spread has considerably narrowed. Gasoline inventories also fell more than expected. Along with the draw in crude and slightly increased refinery demand, the bullish factor seems to dominate in the API’s report. But as usual, market players will wait for the DoE data to be released at 4.30 p.m.

Houston (ex-wharf indications 06-08 )
380cst $580
180cst $658
MGO $1000

New Orleans (ex-wharf indications 06-08)
380cst $585
180cst $631
MGO $1000

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

The Singapore fuel oil markets were mostly flat ranging between -$1.0 to +$1.0 on the Platts window yesterday. The delivered bunker premiums were around $6.0 above cargo prices yesterday. The Singapore market will be closed this coming Thursday and Friday for public holiday. Market will reopen the following Monday.

380cst $597
180cst $600
MGO $910

ARA (Amsterdam - Rotterdam - Antwerp)

Due to the availability problems with hsfo ( long waiting time at refineries, only contracts with some ex wharf suppliers, less spot available at higher premiums) the spread between hsfo and lsfo is minimum.

Indications for delivered bunkers:
380cst : $593
(1.0 %) :$604
180cst: $603
(1.0 %):$ 637
MGO 0.1%S: $ 890