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Crude oil futures extended sharp losses from the previous session on Thursday, as fears over a glut in supplies intensified after data showed that oil supplies in the U.S. rose to the highest level on record last week.

It was to be seen on Wednesday morning that technical buying pressure already eased during the last few days. Therefore, technical constellation was to be interpreted as neutral. Oil futures slightly eased in the first half of the day correcting downwards again after the massive price rally which pushed oil futures considerably upwards by about 18% (Brent) since Friday night. The fundamental market situation stays oversupplied that's why market players interpreted the strong upward movement in the first half of the week as technical phenomenon. First selling signals were built at the WTI and the Brent chart in the course of the afternoon which favoured downward movements from a technical point of view. Yesterday, an attack at a 30,000 bpd oil field in Mabruk, Libya was reported. But since the global market is still oversupplied the Libyan oil production doesn't play an important role. Therefore, market players at ICE and NYMEX hardly recognized this news. The ADP labour market report in the United States which was disappointing and the DOE US oil inventory report which was also released yesterday afternoon was bearish due to the partly unexpected increase in US crude oil and US oil product stocks. The weak tendency at ICE and NYMEX became stronger in combination with technical selling signals. Therefore, Brent and WTI breached their important supports at 55.00 USD and 50.00 USD and oil futures finally settled lower with considerably losses in London and New York.

ICE Gasoil contract for February delivery settled at 535.75 USD on Wednesday, this is 1.00 USD below Tuesday's settlement. With some 37,300 deals the traded volume (front month) was below average.

The constellation changed direction due to the technical buying pressure of the last few days. The stochastic indicator's lines at the Gasoil chart crossed confirming the indicator's selling signals at the Brent and the WTI chart. The bearish signals indicate downtests while Wednesday's lows are already breached. If the RSI at the Brent and the Gasoil chart drops below the 70 line as well, technical selling pressure would increase again. The stochastic indicator's selling signals are distinct this morning. As technical selling pressure could increase again due to a confirmation of the RSI, we consider the technical constellation as neutral bearish in the morning while it could become completely bearish in the course of the day.

U.S.

Nymex above average: Oil futures considerably eased in the morning following fundamental and technical bearish guidelines. The traded volume at NYMEX is far above average at this time of the day. Market players are waiting for the European financial and the forex markets to open, for news concerning strikes at US oil refineries and the economic indicators which are to be released today (see economic calendar).

Forecast: Crude oil +3.8; Distillates -2.0; Gasoline +1.2 million barrels vs previous week.
DOE: Crude oil +6.3; Distillates +1.8; Gasoline +2.3 million barrels vs previous week.
API: Crude oil +6.1; Distillates +0.3; Gasoline +2.0 million barrels vs previous week.

Houston (ex-wharf indications 5-2)
380cst $311
180cst $381
MGO $596

New Orleans (ex-wharf indications 5-2)
380cst $315
180cst $361
MGO $608

Singapore (delivered indications 5-2)

WTI is losing with -$3.48. Singapore paper is up with -$16.70 for 180cst with -$16.50 for 380cst for Feb, and for Mar 180 cst -$17.00 and 380cst with -$17.00 with MGO contracts Feb bearish with -$2.75 and in Mar with -$2.89. The cargo market is bullish with 180cst +$16.20, 380cst with +$17.04 and MGO with +$2.53.

380cst $335
180cst $354
MGO $536

Fujairah (delivered indications 5-2)

380cst $346
180cst $363
MGO $799

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $283
MGO 0.1%S: $517