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Oil prices in London and New York recovered slightly in morning trading, supported by the situation in Libya, encouraging indicators and some short covering. Still, the bearish market sentiment prevails and thus oil prices shed earlier gains at noon. Trading stays susceptible to downward corrections because of the oversupply of crude oil on the market. Improved supply also shows in the time structure of Brent. The strong backwardation the contract had been in has recently been reduced.

ICE Gasoil contract for November delivery settled at 915.00 USD on Friday. This was 17.50 USD below Thursday's settlement. With some 46,200 deals, the traded volume was below average.

Oil prices consolidated within a narrow technical range in electronic morning trading at ICE and NYMEX on Friday, hitting first resistance lines before noon, supported by a couple of encouraging Chinese indicators. After the resistances had proved strong profit taking set in and selling pressure increased after the Stochastic indicator had given a selling signal at the Brent and at the gasoil chart. Oil prices breached several support lines in the process, triggering a wave of technical selling. News that Libyan oil production has slightly recovered and drilling should be resumed soon at the Sharara field also weighed on prices. The rise of the US dollar vs a euro under pressure on expectation that the ECB will cut its core interest rate added to the bearish factors. Oil prices thus settled considerably lower in London and New York. The Brent hit a 3-month low at below 106,00 dollars while gasoil dropped near its 909,00 dollar key support and WTI near its 94,30 dollar support line.

The Stochastic gave a selling signal at the ICE charts on Friday, triggering a wave of technical profit taking. The indicator stays bearish at the ICE also for today even though Friday's price collapse should have absorbed a good part of the bearish potential. The Stochastic's two lines are converging at the WTI chart, leaving the indicator rather neutral this morning, see also technical analysis. The RSI does not give any signals at all but being at the oversold level below 30 at the WTI chart the indicator would trigger a buying signal once it breaches the line. Because of the bearish Stochastic indicator at the Brent and gasoil chart we regard the technical constellation as neutral to bearish today even though after Friday's profit taking there is some short covering seen that could support prices before more downside is opened up.

U.S.

Nymex bearish: Oil prices are recovering a bit from Friday's losses at ICE and NYMEX this morning, supported by better-than-expected Chinese indicators and renewed political tensions in Libya as traders cover their short positions. The traded NYMEX volume is below average for this time of day. Market players anticipate the opening of European markets and the release of a few indicators as well as the development of the US dollar that favoured profit taking on oil markets on Friday.

Houston (ex-wharf indications 1-11)
380cst $603
180cst $664
MGO $992

New Orleans (ex-wharf indications 1-11)
380cst $610
180cst $655
MGO $995

Singapore:

380cst $598
180cst $607
MGO $905

Fujairah (delivered indications 4-11)

380cst $602
180cst $665
MGO $985

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $580
(1.0 %) :$600
180cst: $612
(1.0 %):$ 631
MGO 0.1%S: $ 888