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Brent oil futures rallied to a two-week high on Thursday, as concerns over escalating violence in Iraq boosted prices.

Oil markets showed a steadier tendency on Wednesday morning fostered by the EIA's bullish monthly energy report and a higher risk premium regarding Iraq, where islamists took control over the second largest city Mosul. Quotations rose in the first half of the day, even though investirs remained cautious ahead of the announcement of the OPEC's meeting results and the release of the DOE's oil inventories data. The fact that the OPEC left its production ceiling unchanged at 30.0 mbpd didn't take market players by surprise. Oil markets thus hardly reacted on the news. The figures of the DOE were more surprising, however, contrasting the API's data. In a first reaction on the DOE's report, quotations at ICE edged lower as product supply has improved. The WTI contract was supported instead as crude oil futures overall and in Cushing declined. In all, oil futures consolidated on a high level. The situation in Irak provided additional momentum. Extremists are advancing toward Baghdad having already seized Baidschi and Tikrit. Futures at ICE and NYMEX finally settled near their highs gaining more ground this morning.

ICE Gasoil contract for June delivery settled at 893.00 USD on Wednesday, this is +8.25 USD vs Tuesday's settlement. With some 26,800 deals, the traded volume (front month) was below average.

The RSI surpassed 30% at the Gasoil chart yesterday providing oil markets with some technical momentum. The selling signal has largely been spent by now, as oil prices sharply rose yesterday. At the Brent and the WTI chart, the indicators are still neutral. However, the lines of the stochastic indicator have met at the WTI chart.. If the lines of the indicator cross in the course of the day, there would be a selling signal favouring a technical downward move. As long as there is no such selling signal, we still assess the technical constellation as neutral, however.

U.S.

Nymex on average: Oil futures at ICE and NYMEX keep rising against the backdrop of the increasingly unstable situation in Iraq. The traded volume at NYMEX is on average at this time of day. Investors eye the opening of stock and forex markets and will closely watch the development of the situation in Iraq. Moreover, they are waiting for today's economic indicators.

API: Crude oil +1.5; Distillates -0.3; Gasoline -0.4 million barrels vs previous week.
DOE's: Crude oil -2.6; Distillates +0.9; Gasoline +1.7 million barrels vs previous week.
Forecasts: Crude oil -1.5; Distillates +0.9; Gasoline +1.0 million barrels vs previous week.

Houston (ex-wharf indications 12-6)
380cst $603
180cst $713
MGO $974

New Orleans (ex-wharf indications 12-6)
380cst $606
180cst $686
MGO $983

Singapore (delivered indications 12-6)

WTI is up with +$0.75. Singapore paper is up with +$3.75 for 180cst and +$4.75 for 380cst for Jun, and for Jul 180 cst +$5.00 and 380cst with +$5.25 with MGO contracts being bullish in Jun with +$1.75 and in Jul with +$1.70. The cargo market is bearish with 180cst +$1.24, 380cst with +$2.13 and MGO with +$0.27.

The Singapore fuel oil prices extended gains yesterday and rose up to $2.0 during the Asian Platts window. The delivered bunker premiums were firmer ranging between $4.5 and $6.0 above cargo prices.

380cst $602
180cst $620
MGO $899

Fujairah (delivered indications 12-6)

380cst $611
180cst $642
MGO $985

ARA (Amsterdam - Rotterdam - Antwerp)

380cst : $588
(1.0 %) : $638
180cst: $628
MGO 0.1%S: $885