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Crude oil prices stabilized this morning after posting one of their biggest selloffs this year the previous day over Greece's rejection of debt bailout terms and China's stock market woes.

Oil prices extended their losses on Monday for fundamental and technical reasons, testing their downward potential at the beginning of the European session. The "no" vote the Greek people delivered in Sunday's referendum, the slowing of economic growth in China, the prospect of the return of Iranian crude to the global market as well as a rising number of active U.S. oil rigs weighed on prices that fell through several short-term support lines before noon. After oil had breached Friday's lows the technically driven selling pressure increased. The bearish Stochastic indicator at ICE and NYMEX charts and the breach of the lower limit of the WTI's lateral trend channel end of last week also delivered some bearish potential. The U.S. crude had a strong key support between 54.00 and 54.25 USD that limited the losses at this time of the day. When the support was breached later in the session oil's slide accelerated and the front month contracts dropped to a level last hit in April in London and New York and also settled near this level.

ICE Gasoil contract for July delivery settled at 536.25 USD on Monday, this is 18.75 USD below Friday's settlement. With some 53,100 deals the traded volume (front month) was about on average.

The Stochastic indicator's selling signals having been triggered a few days ago they should have been meanwhile absorbed by oil's sharp decline on Friday and Monday. As for the RSI, the indicator does not give any fresh signals this morning but is at the oversold level. Oil prices in London and New York having settled below the lower limits of their Bollinger Bands on Monday, the strong technical selling pressure has decreased, traders opting for some short covering. In the absence of fresh bullish signals and due to the fact that the 7 and 21 days moving average lines are still diverging after having crossed on Friday, we assess the technical constellation as neutral to bearish this morning. We would like to point out, however, that should prices fall below the previous day's lows a fresh wave of technically driven selling orders would be triggered.

U.S.

Nymex above average: Oil futures rose in Asian trading hours this morning, recovering from their long-term lows at ICE and NYMEX when traders covered their short positions after yesterday's rally. In Globex electronic trading oil is trading rather sideways in a narrow margin. The traded volume at NYMEX is above average at this time of the day. Investors are waiting for the European financial and forex markets to open and for the release of a few economic indicators. They will also eye closely the nuke talks in Vienna for any progress made and the developments in the Greece issue, as well as the release of the API's data on U.S. petroleum stocks and of the EIA's monthly energy report.

Houston (ex-wharf indications 7-7)
380cst $331
180cst $462
MGO $587

New Orleans (ex-wharf indications 7-7)
380cst $338
180cst $395
MGO $555

Singapore (delivered indications 7-7)

WTI is losing with -$2.00. Singapore paper is down with -$8.00 for 180cst up with -$8.35 for 380cst for Jul, and for Aug 180 cst -$8.25 and 380cst with -$8.60 with MGO contracts Jun losing with -$1.99 and in Jul with -$1.96. The cargo market is bearish with 180cst -$10.84, 380cst with -$15.96 and MGO down with -$2.56.

380cst $310
180cst $321
MGO $520

Fujairah (delivered indications 7-7)

380cst $310
180cst $341
MGO $723

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $298
MGO 0.1%S: $502