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As was to be expected this morning oil futures in London and New York have little changed in morning trading. After their hefty losses on Friday and Monday oil prices consolidate without a clear direction as traders hesitate in few of a more volatile second half of the week. DoE data on Wednesday and the ECB meeting and US third quarter GDP on Thursday are expected to provide some direction.

ICE Gasoil contract for November delivery settled at 904.00 USD on Monday. This was 11.00 USD below Friday's settlement. With some 49,300 deals, the traded volume was below average.

After last week's hefty losses oil prices traded higher in London and New York on Monday when market participants liquidated their short positions. Still, the bearish technical constellation weighed, pushing prices below their support lines after the second resistances had proved strong. The Brent has left its backwardation constellation, the market condition wherein the price of a futures contract is trading below the expected spot price, which is a sign for a well supplied market and weighs on oil prices. While the one-day interruption of the oil flow through the Kirkuk-Ceyhan pipeline at the weekend had no effect on oil prices, contradicting information on Libyan oil production limited the downward potential. Oil exports obviously remain blocked by protesters and demonstrants and production is lower than assumed. This supported the price of the two benchmark crudes while oil products at ICE and NYMEX settled near their day's lows.

The Stochastic is still bearish at the ICE charts but its selling signal was triggered last week and the bearish potential should be meanwhile used up after investors took profit on Friday and on Monday. At the WTI chart the indicator is still neutral but its two lines are converging and a buying signal would be triggered once they cross. The RSI lingers at the oversold level below the 30 line and could give an additional buying signal upon breaching the line, see also technical analysis. As we believe that the Stochastic indicator's selling signals at the Brent and gasoil chart are already priced in we regard the technical constellation as neutral today. Still, we expect market participants to consolidate their risk positions before the release of the weekly DoE data on Wednesday.

U.S.

Nymex bullish: Oil prices are trading in a narrow range sideways at ICE and NYMEX this morning, a better-than-expected Chinese HSBC indicator and some short covering lend some support. 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 economic indicators.

Survey of US Petroleum inventories due out tonight at 22:30(API) and Thursday at 17:00(DOE).
Crude oil +2.2; distillates -1.5; gasoline -0.4 million barrels vs previous week.
Houston (ex-wharf indications 4-11)
380cst $592
180cst $659
MGO $983

New Orleans (ex-wharf indications 4-11)
380cst $602
180cst $651
MGO $986

Singapore

380cst $598
180cst $603
MGO $900

Fujairah (delivered indications 5-11)

380cst $602
180cst $661
MGO $980

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $577
(1.0 %) :$598
180cst: $610
(1.0 %):$ 626
MGO 0.1%S: $ 894