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Oil futures bounced off their first resistances during morning trade, but Brent stayed above 110 USD, undercut by supply fears in the North Sea. With low volumes expected in view of key events in Washington and Geneva, oil markets are likely to see a rather volatile session. Any changes in the budget deadlock in the USA will impact today’s session and possible disruptions of North Sea supply may raise some upward pressure on the European benchmark, further narrowing the price gap with WTI, as oil workers are on strike at Scotland’s only refinery. This might seriously compromise Forties supplies as the refinery is playing a key role as far as Forties flows are concerned. As to U.S. oil inventory data, the API’s figures will be released tomorrow, a day later than usual due to Columbus Day on Monday. But the DoE may not provide any data this week due to the persisting government shutdown in the USA.

The slightly bullish technical constellation and the strong increase in Chinese crude imports in September provided a firm tendency at the oil market Monday morning. However, given that U.S. budget talks had stalled over the weekend and a detail seemed farther away than before, oil prices plummeted around noon. Selling pressure increased accordingly and caused prices to fall to their supports in the early afternoon. While WTI bounced off its first support at 101.15 USD, Brent and G.Oil breached their short-term support at 930.00 USD and 110.00 USD, respectively. But the latter proved to be strong and prevented a strong technical downturn. Shortly after our office hours, oil futures in London and New York shot up from their day's lows and offset the losses incurred in the course of the day. The reason was news from the U.S. Congress, saying that Democrats and Republicans were close to reaching a deal. As a result, ICE contracts closed at their opening level.

ICE Gasoil contract for November delivery settled at 931.50 USD on Monday. This was 2.00 USD below Friday's settlement. With some 57,300 deals, the traded volume was above average.

The Stochastic is neutral again for WTI and Brent and only slightly bearish for G.Oil. The RSI has slid below the 70%-line at the Brent and G.Oil chart, the upward trendchannel remains intact, however, see also technical analysis. Thus, we consider the technical constellation as neutral to bearish this morning. Real selling pressure would only arise if the Stochastic turned bearish again for Brent and WTI and if futures escaped their short-term uptrend. At the moment, investors may focus on fundamentals since U.S. budget conflict and nuke talks with Iran present guiding events this week.

U.S.

Nymex bearish: After the up and down at the oil market yesterday, traders are now waiting for fresh news regarding U.S. budget negotiations. So they have adopted a wait-and-see mode for the time being and oil prices have been moving in sideways. The traded volume at NYMEX is about average for this time of day. Market players are now eying the performance of European markets, some economic indicators and for further developments in the USA.

The U.S. oil inventory data, the API’s figures will be released tomorrow, a day later than usual due to Columbus Day on Monday. But the DoE may not provide any data this week due to the persisting government shutdown in the USA.

Houston (ex-wharf indications 14-10)
380cst $604
180cst $661
MGO $1007

New Orleans (ex-wharf indications 14-10)
380cst $606
180cst $652
MGO $1007

Singapore (closed due to bank holiday)

380cst $616
180cst $617
MGO $940

Fujairah (delivered indications 11-10)

380cst $619
180cst $676
MGO $1010

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $588
(1.0 %) :$615
180cst: $626
(1.0 %):$ 647
MGO 0.1%S: $ 907