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West Texas Intermediate oil futures declined this morning, as market players awaited key U.S. weekly supply data to gauge the strength of oil demand from the world’s largest consumer.

Investors at oil markets in London and New York renewedly focused on the situation in Iraq yesterday. The attacks of the terrorist group Isis brought Iraq back on the scene last week. Whilst troops of the Iraqi government prevented that Isis advanced in Baghdad, the threat persists. Since the situation neither deteriorated, nor improved yesterday, oil futures struggled to find a direction consolidating on a high level. In contrast to the other contracts, the US crude oil contract tended to the downside in the evening as the US market is less dependent from imports than Europe. Traders thus took some profits after the risk premium had increased in the past few days. The IMF's downward revision of the US GDP forecast also provided slightly bearish cues. The IMF expects that in 2014 the US economy will only grow by +2.0%. This is -0.8 basis boints less than in the previous forecast. Concluding, oil futures saw but little change until late in the afternoon, however. Therefore, futures at ICE consolidated on a high level whereas WTI slightly retreated.

ICE Gasoil contract for July delivery settled at 924.50 USD on Monday, this is +3.75 USD vs Friday's settlement. With some 58,200 deals, the traded volume (front month) was on average.

The stochastic indicator had already given a selling signal at the Brent chart yesterday morning. This selling signal has now been confirmed at the Gasoil and the WTI chart. After the lines of the stochastic indicator had crossed, it has turned bearish at ICE as well as at NYMEX charts favoring some technical profit taking. Meanwhile, the RSI is staying above 70%, not giving any selling signal yet. However, the indicator is moving in overbought territory and might prompt investors to take some profits from the long-positions they had raised during the price rally last week. The technical selling pressure has thus increased compared to yesterday. This might impact on oil futures more strongly again. Still, we continue assessing the technical constellation as neutral to bearish. If futures at ICE sustainably break below yesterday's lows or if the RSI drops below 70%, technical selling pressure should renewedly increase. In this case, the technical constellation would turn bearish.

U.S.

Nymex above average: This morning, oil futures saw light profit taking but quotations are still trading above yesterday's lows. The downward move has not accelerated as the first supports are still limiting losses. The traded volume at NYMEX is above average at this time of day. Investors are now closely watching the opening of stock and forex markets and the development of the situation in Iraq. They will also keep an eye on the development of the gas dispute between Ukraine and Russia while looking ahead to today's economic indicators, and the IEA's monthly energy report.

Forecasts: Crude oil -0.8; Distillates +0.4; Gasoline -0.6 million barrels vs previous week.

Houston (ex-wharf indications 17-6)
380cst $615
180cst $717
MGO $985

New Orleans (ex-wharf indications 17-6)
380cst $619
180cst $698
MGO $987

Singapore (delivered indications 17-6)

WTI is down with -$0.86. Singapore paper is down with -$2.00 for 180cst and -$1.50 for 380cst for Jul, and for Aug 180 cst -$1.00 and 380cst with -$1.00 with MGO contracts being bearish in Jul with -$0.65 and in Aug with -$0.54. The cargo market is bearish with 180cst -$4.14, 380cst with -$2.65 and MGO with -$0.72.

The Singapore fuel oil prices corrected lower after a strong surge last week, assessed down between $4.0 and $2.5 during the Asian Platts window yesterday. The delivered bunker premiums were around $4.0 above cargo prices. Bunker fuel oil swaps gained app. $1.5/mt at the front of the curve both for Rotterdam and Singapore papers. The back end was stronger with cal15 papers assessed nearly $3/mt up vs previous day close.

380cst $612
180cst $633
MGO $925

Fujairah (delivered indications 17-6)

380cst $622
180cst $650
MGO $985

ARA (Amsterdam - Rotterdam - Antwerp)

380cst : $589
(1.0 %) : $631
180cst: $629
MGO 0.1%S: $888