Crude prices consolidated on a high level this morning after yesterday's sharp rise. Still, they didn't show any clear direction. Brent and WTI traded slightly firmer than product futures which is due to the fact that the DOE's data on US crude oil inventories were clearly bullish for crude oil. Whilst Brent exceeded its short-term resistance at 107.00 dollars, Gasoil stayed below its first resistance even briefly testing its supports. However, the support at 903.75 dollars limited losses. Market players are now waiting for new cues. These cues might be provided by a string of US data due later this afternoon (figures on inflation and weekly jobs data, for example).
Against the backdrop of the API's data on US oil inventories released Tuesday night, oil futures in London and New York showed no clear direction on Wednesday morning. By noon, Brent declined for some technical reasons falling below its key-support at 106.00 dollars. This triggered further technical selling orders. The other oil contracts didn't keep track of this downward move, however. Since the February Brent front month contract is going to expire tonight, the oscillations regarding this contract were not really representing the actual situation anyway. In the course of the afternoon, oil futures increasingly tended to regain ground bolstered by better than expected economic data out of the USA. Brent climbed back above 106.00 dollars, too, even breaching first resistances in the course of afternoon trading. The technical constellation, that had been slightly bearish on Wednesday morning, turned bullish as the RSI surpassed 30% at ICE and NYMEX charts - giving a buying signal. Since the growth outlook seems rather positive and equities marked gains yesterday, sentiment at financial markets was increasingly bullish. At oil markets, this effect was reinforced by the DOE's data on US oil inventories. The DOE's report showed a significant draw in crude oil stocks and a massive rise in distillate demand leading to a sharp increase in oil prices. In the course of the afternoon, product futures and ICE contracts slightly pulled back from their highs but still they settled with considerable gains. Given the bullish data on US oil stocks, WTI gained the most ground and so the spread between the February contracts of Brent and WTI narrowed to about 12.50 dollars, the spread between the March contracts to about 11.70 dollars.
ICE Gasoil contract for February delivery settled at 913.75 USD on Wednesday. This was +13.50 USD above Tuesday's settlement. With some 84,600 deals, the traded volume was far above average.
OPEC: According to the OPEC's latest monthly energy report, the organisation has left its global oil demand growth forecast for 2013 and 2014 nearly unchanged. The OPEC’s oil output dropped by -20,000 bpd in December amounting to 29,44 mbpd in that month. The demand for OPEC oil is seen at 29.9 mbpd in 2013 - unchanged to the preceeding estimate. Since the oil production of countries that don't belong to the OPEC is to increase more quickly than global oil demand in 2014, the OPEC's share in global oil supplies is likely to further decrease.
The selling signal the stochastic indicator provided yesterday morning has meanwhile waned. The technical constellation even turned late yesterday afternoon as the stochastic indicator didn't give a selling signal at the WTI chart which would have confirmed those at the ICE charts. The RSI surpassed the 30%-marker giving a buying signal. Consequently, Gasoil and WTI have surpassed the upper limits of their latest short-term downtrends. Since the RSI already gave its buying signal yesterday afternoon and the rise at oil markets is likely to have spent most of its influence, we assess the technical constellation as rather neutral this morning.
U.S.
Nymex gaining: After yesterday evening's lows, oil markets have seen a modest upward correction this morning. However, the moves remain refrained. The traded volume at NYMEX is about on average for this time of day. Investors are now closely eying the development at stock markets waiting also for new cues from forex markets. They will also keep monitoring the situation in Libya, Iraq and South Sudan, as well as important economic data.
Survey: Crude oil -1.2; distillates +1.4; gasoline +2.2 million barrels vs previous week.
API: Crude oil -4.1; distillates -1.7; gasoline +5.4 million barrels vs previous week.
DOE: Crude oil -7.7; distillates -1.0; gasoline +6.2 million barrels vs previous week.
Houston (ex-wharf indications 16-1)
380cst $574
180cst $645
MGO $961
New Orleans (ex-wharf indications 16-1)
380cst $586
180cst $650
MGO $988
Singapore
WTI is still bullish, gaining with +$1.21. Singapore paper is back on its bullish track with +$5.50 for 180cst and +$3.75 for 380cst for Feb, and for Mar 180 cst +$4.50 and 380cst +$4.00 with MGO contracts Feb +$0.45 and Mar +$0.53. The cargo market is mixed with 180 cst -$2.40, 380cst -$2.44 and MGO -$0.46.
The Singapore fuel oil markets fell $2.5 during the Asian Platts window yesterday. Bunker demand was heard to be mixed with delivered bunker premiums ranging between $6.5 and $7.5 above cargo prices. Bunker fuel oil swaps gained app.$5.5/mt at the front and a dollar more at the backend of the forward curve. Visco spreads remain strong in the front with spot closing at $8.57/mt. February is trading at app.$11.25-11.00 while forward prices remain stable trading in a range of $8.5-8.0/mt for the rest of the year.
380cst $598
180cst $613
MGO $895
ARA (Amsterdam - Rotterdam - Antwerp)
Indications for delivered bunkers:
380cst : $565
(1.0 %) : $594
180cst: $595
MGO 0.1%S: $ 870
