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Futures fell as much as 1.4 percent in New York and are headed for a weekly loss of 2.1 percent. Producers outside the Organization of Petroleum Exporting Countries will increase output by a near-record 1.7 million barrels a day next year to 56.4 million, the IEA said today in its monthly market report. Brent’s premium to WTI climbed to a four-month high as the detention and release of Libyas prime minister fanned concern the country’s oil exports may face fresh disruptions.

WTI for November delivery slid as much as $1.46 to $101.55 a barrel in electronic trading on the New York Mercantile Exchange and was at $101.76 as of 1:26 p.m. London time. The volume of all futures traded was about 82 percent above the 100-day average. Brent for November settlement dropped as much as 74 cents to $111.06 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude’s premium to WTI widened to as much as $10.01, the biggest spread since April 26. The IEA also trimmed its forecast for global oil demand growth in 2014. World fuel consumption will increase by 1.1 million barrels, or 1.2 percent, to 92 million barrels a day in 2014, according to its monthly market report. After slumping in late trade Wednesday, oil contracts at ICE and NYMEX were edging higher Thrusday morning. However, they soon bounced off their strong second resistance due to a renewed shutdown of the Seaway pipeline and rekindling concerns over Middle East oil supplies after the Libyan Prime Minister had been taken hostage. Naturally, this made a much greater impact on ICE futures. Thus, WTI could hold relatively steady compated to the other contracts, dropping back to its day's low shortly after the start of New York trade. Only when news leaked that Repunblicans had been discussing a preliminary lifting of the debt ceiling for a limited period of 6 weeks behind closed doors, did oil prices, both in London and New York, climb over their stable resistances. In the wake of rallying stock markets, oil contracts quickly rose to new day's highs. Additional technical buying orders supported the upturn. In the end, ICE futures closed at their day's highs while NYMEX contracts at least settled with some gains. Still, WTI is poised for its fourth weekly loss in a row.

ICE Gasoil contract for November delivery settled at 945.50 USD on Thursday. This was 20.75 USD above Wednesday's settlement. With some 144,000 deals, the traded volume was far above average.

Yesterday afternoon, the Stochastic had given off a buying signal at the Brent chart. But we expect it to lose its effect in the course of the day as the indicator's lines are paralleling at the G.Oil chart and have not yet converged at the WTI chart. Moreover, the RSI is moving in overbought territory at the Brent and the G.Oil chart, which favours some profit taking, given yesterday's strong decline in prices. Although a new short-term uptrend has formed for the North Sea crude, we still consider the technical constellation as neutral in view of the overbought market situation and the lacking signals from the Stochastic oscillator.

U.S.

Nymex bullish: Given yesterday's price increase, oil markets are holding steady at a high level this morning. Market players pause while waiting for the further proceedings in U.S. budget negotiations. It remains to be seen if both parties really agree on temporarily lifting the debt ceiling. As long as this has not been confirmed, market players may stay on the side-lines. The traded volume at NYMEX is below average for this time of day. Market players are now eying the performance of European markets, fresh signals from forex trading and today’s economic data. However, it is very likely that most of the data will not be released due to the government shutdown.

Houston (ex-wharf indications 11-10)
380cst $611
180cst $667
MGO $1010

New Orleans (ex-wharf indications 11-10)
380cst $613
180cst $659
MGO $1013

Singapore

Crude is neutral with WTI -$0.02. Singapore paper is bullish with +$8.80 for 180cst and +$9.45 for 380cst for Oct, and for Nov 180 cst +$8.00 and 380cst +$9.00 with MGO contracts Oct +$1.78 and Nov +$0.90. The cargo market is bullish with 180cst +$1.08, 380cst +$2.07 and MGO +0.32.

The Singapore fuel oil market rose some $1.0- 2.0 during the Asian Platts window yesterday. The latest heavy residual inventory saw a slight draw -0.13 mbbl to 21.85 mbbl. Delivered bunker premiums were between $4.5 to $6.5 above cargo prices. Bunker fuel oil swaps gained up to $12.5/mt at the front of the forward curve for Singapore papers. Backend was app.$1/mt weaker. Visco spread remains weak on spot and closed at $2.24/mt yesterday. Balance October is trading at app. $3.0-3.50 while forward prices remain stable trading in a range of $7.0-7.5/mt for cal14. This morning markets are trading slightly higher.

380cst $618
180cst $620
MGO $940

Fujairah (delivered indications 11-10)

380cst $619
180cst $676
MGO $1010

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $595
(1.0 %) :$615
180cst: $625
(1.0 %):$ 645
MGO 0.1%S: $ 905