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Oil markets are dominated by the preliminary accord between Iran and the western powers today. Market players will in part reduce the risk premium, which is why oil futures already sharply declined at the beginning of the European session. Sanctions against Iranian oil exports largely remain, however, and so the dreadded "oil flood" has not taken place (yet). Over the past few months Iran has stored large amounts of crude oil on tankers off the shore which might have flooded the market in case the oil embargo had been lifted. Some analysts had expected the price of Brent to drop by 10 to 20 USD in this case. Now, the price decline will be less significant.

ICE Gasoil contract for December delivery settled at 937.75 USD on Friday. This was 14.50 USD above Thursday's settlement. With some 52,200 deals, the traded volume was about on average.

Against the backdrop of a slightly bullish technical constellation and rather bullish market fundamentals, oil futures in London and New York ticked higher on Friday morning already hitting fresh month-highs by noon. The breachment of the first technical resistances generated more automatic buying orders. Oil futures were fostered by the high US demand concurring with the cold snap in vast parts of the country, by the scepticism regarding the nuke talks with Iran and by the latest refinery outages in Texas, which dented demand for WTI crude but also hampered a recovery in US product stocks at the beginning of the winter season. Consequently, product contracts at NYMEX and ICE rose more sharply, whereas WTI was rather weighed down by spreadbets. The spread between Brent and its US benchmark even briefly widened to more than 16 dollars. Futures at ICE thus settled with gains ahead of the weekend whereas WTI marked some losses. However, traders stayed on the sidelines as the negotiations in Geneva regarding Iran's nuclear program dragged on until the weekend. From Saturday to Sunday, a preliminary accord was found which is to last for the next 6 months containing the easing of some sanctions against Iran. This morning, oil futures at ICE and NYMEX have thus sharply declined.

The RSI has fallen below 70% at both the Gasoil chart as well as the Brent chart giving a clear selling signal. The stochastic indicator is still neutral at all charts giving a selling signal only when its lines cross. Some analysts regard the 108 dollars-marker as a key-support for Brent today. If the contract drops below this threshold, more technical selling orders are likely to be generated. Given the selling signal provided by the RSI, we assess the technical constellation as bearish this morning. If the stochastic indicator gives additional selling signals it might add to selling pressure.

U.S.

Nymex bearish: Given the accord in the nuke talks with Iran, oil futures have sharply retreated in the early morning. Currently, traders are cutting most of their long positions. In part, they even raise their short positions as the technical constellation already provides some selling signals. The traded NYMEX volume is far above average for this time of day. Market players are eying the development at European markets, new signals from forex trading and some economic indicators.

Houston (ex-wharf indications 21-11)
380cst $590
180cst $658
MGO $979

New Orleans (ex-wharf indications 21-11)
380cst $592
180cst $644
MGO $982

Singapore

Crude is dropping with WTI -1.67. Singapore paper is turning bearish as well with -$5.50 for 180cst and -$5.25 for 380cst for Dec, and for Jan 180 cst -$5.00 and 380cst -$4.90 with MGO contracts Dec -$0.20 and Jan -$0.54. The cargo market is not turning yet with 180 cst +$1.93 380cst +$2.43 and MGO +$2.11.

380cst $598
180cst $603
MGO $920

Fujairah (delivered indications 25-11)

380cst $616
180cst $662
MGO $1000

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $575
(1.0 %) :$606
180cst: $604
(1.0 %):$ 636
MGO 0.1%S: $ 900