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Brent crude oil steadied around $114 on Monday, consolidating after a week of gains, as a military strike against Syria looked less imminent and worries over possible Middle East supply disruptions receded. U.S. President Barack Obama said he would seek congressional authorisation for punitive military action against Syria, almost certainly delaying any air strikes until Washington's summer recess ends on Sept. 9. Oil got a boost from improved factory activity in China and the euro zone, which stoked hopes of a revival in economic growth and oil demand growth. Brent futures fell as low as $112.20 a barrel, down $1.81, but then rallied to around $114.15 by 0950 GMT. Declines in the U.S. benchmark in NYMEX after-hours trade were even steep. It dropped to a low of $104.21, down $3.44, before bouncing back to around $107.00. U.S. oil futures floor trading was closed on Monday for the Labor Day public holiday.

On Friday morning oil futures in London and New York initially ticked slightly lower, after the British parliament opposed to a participation of the U.K. in a military strike against Syria. In the course of the day, quotations changed track, however, as market players wanted to be on the safe side increasing their long positions and avoiding speculative short positions ahead of the prolonged weekend in the USA (Labor Day). ICE Gasoil climbed to its resistance at 975.00 USD, Brent to the 115.30 USD marker. However, these resistances remained strong even after several tests limiting oil futures' upward slack. Since the USA are celebrating Labor Day today, the traded volume was already far lower than average on Friday. At the weekend, Barack Obama explained he wanted to leave the decision on a military strike against Syria to the Congress. Thus, his rigid rhetoric’s towards the Assad regime gradually are losing force. Since there does not seem to be a clear majority in the Congress that might vote for a military intervention in Syria, investors have taken some profits in early trading this morning cutting the long positions they accumulated last week.

ICE Gasoil contract for September delivery settled at 969.50 USD on Friday. This was 9.25 USD below Thursday's settlement. With some 37,300, deals the traded volume was above average. The stochastic indicator remains bearish at the Brent and the WTI chart and gives a selling signal at the Gasoil chart as well, by now. At the Gasoil chart the RSI is also bearish as it slipped below 70%. This indicator might also give a selling signal soon for Brent if it falls below 70% at the Brent chart, too. From a merely technical perspective, we therefore assess the situation as bearish this morning, even though last nights decline in oil prices has already spent some potential for profit taking. The technical indicators still favor profit taking, however, while the technical selling pressure from the RSI might increase for the Brent.

U.S.

Nymex neutral: Since even Barack Obama has backpedalled regarding a military strike in Syria leaving the decision to the Congress, traders have reduced the risk premium which was priced in against the backdrop of the possibility of a strike. The traded volume at NYMEX is far higher than average for this time of day despite the Labor Day in the USA. Market players are now waiting for European markets to open, for new signals from forex trading and for some economic data to be released in the course of the day. They will also continue to closely eye the developments in the Middle East.

Houston (ex-wharf indications 30-08)
380cst $620
180cst $692
MGO $1026

New Orleans (ex-wharf indications 30-08)
380cst $623
180cst $674
MGO $1028

Singapore

Crude is bearish with WTI -$1.25. Singapore paper is dropping with -$6.05 for 180cst and -$6.50 for 380cst for Sep, and for Oct 180 cst -$6.00 and 380cst -$6.50 with MGO contracts Sep -$1.75 and Oct -$1.75. The cargo market is tracking crude and paper with 180cst -$7.74, 380cst -$7.21 and MGO -$0.27.

The Singapore fuel oil markets fell more than -$7.0 during the Asian Platts window last Friday as crude prices corrected from the high. The delivered bunker premiums improved slightly to around +$1.0 to +$2.0 above cargo prices last Friday as lower outright attracted some buying interest. Bunker fuel oil swaps lost $6-7/mt at the front of the forward curve both for Singapore papers. Backend again was stronger with Cal15 papers posting only some $3/mt losses. This morning markets are trading down.

380cst $620
180cst $626
MGO $950

Fujairah (delivered indications 02-09)

380cst $605
180cst $664
MGO $995

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. In September ESSO Antwerp will have even more avail problems as they are working on maintenance of their refinery. Because of this, local Antwerp suppliers will need to buy more product in Rotterdam, therefor long waitinglines at Rotterdam refineries and storage are to be expected, with premiums on price as a result.

Indications for delivered bunkers:
380cst : $698
(1.0 %) :$618
180cst: $628
(1.0 %):$ 648
MGO 0.1%S: $ 938