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Crude oil tumbled sharply this morning, amid indications Saudi Arabia lowered prices to buyers in the U.S.

Oil futures in London and New York eased in early trading on Monday morning and affected by disappointing Chinese economic data and the stronger dollar. WTI rebounded from its 80.00 USD support and so technical buying orders pushed oil futures on a higher level in the afternoon. Market players act cautiously in general, waiting for the release of the official prices for Saudi Arabia's December deliveries. These were announced in the late evening. The cut in the prices of deliveries to the United States was a strong bearish signal. Especially the US crude oil contract dropped dragging the other contracts down as well. WTI hit a new 2-year-low. For the first time since June 2012 the contract settled below the 80.00 USD marker again. The price drop at ICE was not as sharp as at NYMEX but finally all prices settled lower near their intraday lows.

ICE Gasoil contract for November delivery settled at 746.50 USD on Monday, this is 4.75 USD above Friday's settlement. With some 54,500 deals the traded volume (front month) was on average.

The stochastic indicator stayed bearish as its lines keep diverging at ICE and NYMEX. The RSI is neutral, however, staying between 30 and 70 percent. There are no fresh selling signals even though with WTI having dropped below the 80.00 USD marker and having hit new long-term lows, fresh downside was generated. The selling signals of the stochastic indicator should have been absorbed by now, but we consider the technical constellation neutral to bearish for the time being as the indicator is still interpreted as slightly bearish. Should oil futures sustainably drop below yesterday's long-term lows, technical selling orders could be triggered again.

U.S.

Nymex on avarage: After the price drop last night oil futures are consolidating on a lower level without clear direction testing yesterday's long-term lows again. The traded volume at NYMEX is on average at this time of the day. Market players are waiting for the European financial and the forex markets to open and will eye the situation in the geopolitical hotspots and the economic indicators which are to be released today.

Forecast: Crude oil +1.9; Distillates -2.2; Gasoline -1.0 million barrels vs previous week.

Houston (ex-wharf indications 4-11)
380cst $462
180cst $563
MGO $840

New Orleans (ex-wharf indications 4-11)
380cst $470
180cst $528
MGO $842

Singapore (delivered indications 4-11)

WTI is losing with -$0.33 Singapore paper is down with -$11.25 for 180cst with -$10.75 for 380cst for Nov, and for Dec 180 cst -$11.25 and 380cst with -$12.00 with MGO contracts Nov bearish with -$1.53 and in Dec with -$1.57. The cargo market is losing with 180cst -$5.11, 380cst with -$4.37 and MGO with +$0.34.

The Singapore fuel oil prices fell app. $5/mt during the Asian Platts window yesterday. The Singapore physical cargoes saw aggressive offers pressuring premiums much lower. The delivered bunker premiums were +$5.75 above cargo prices yesterday.

380cst $470
180cst $486
MGO $734

Fujairah (delivered indications 4-11)

380cst $475
180cst $530
MGO $940