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Crude oil prices gained in Asia, shrugging off poor flash manufacturing estimates on China and generally bearish news on the supply outlook as investors bet on a rebound after a series of sharp falls and looked ahead to rig count data in the U.S.

After Brent and WTI slumped on Wednesday, downward potential for these contracts was largely spent on Thursday. The first areas of support near 55.90 USD Brent and 49.15 USD WTI remained strong until the evening, limiting the downside. Since the product futures like Gasoil had but slightly retreated on Wednesday, there was more downward potential for this category. Even so, Gasoil found strong support at 506.25 USD. The euro/dollar, which tested its key-resistance at 1.10 USD in the course of the day, bolstered oil futures at ICE and NYMEX as a weaker US dollar makes dollar-priced oil cheaper for investors outside the USA. The better than expected economic indicators out of the USA brought fresh cues in the afternoon. Whilst the data actually weighed on the euro, they fostered oil prices for a healthy economy leads to expect that oil demand will rise. That is why the Stochastic indicator temporarily generated a technical buying signal at the Brent chart. However, this signal was not sufficient for a lasting upward correction. The bearish factors - particularly the rise in US crude oil stockpiles - regained the upper hand in the evening. Once again, it was the WTI contract that was the first to breach its supports at 49.15 and 49.00 USD which had remained strong until then. This automatically triggered further technical selling orders, dragging the other futures down as well. Little later, Brent broke below its support at 55.90 USD triggering another technical sell-off. Oil futures thus ended the day clearly in the red.

ICE Gasoil contract for August delivery settled at 510.75 USD on Thursday, this is -3.75 USD above Wednesday's settlement. With some 51,700 deals the traded volume (front month) was slightly below average.

The Stochastic indicator briefly generated a buying signal at the Brent chart. However, this signal has already waned. At the WTI chart another buying signal might be generated but the lines of the indicator haven't crossed sustainably enough yet to give clear cues. Currently, oil futures are still trading within their short-term downtrend which is limited by the lower Bollinger Band and the MA7. This provides some upward slack for oil futures even though the buying signals for a clear upward correction are still lacking. Such signals might be provided by the Stochastic indicator if its lines sustainably cross at the Brent or the WTI chart and/or the RSI exceeds 30%. In this case, the currently slightly bearish technical constellation would quickly turn bullish as the market is set for a recovery given the oversold situation.

U.S.

Nymex above average: After having hit new lows late Thursday evening, oil futures slightly recovered overnight. Still, they have traded in a narrow range on a rather low level in Asian trade and electronic trading this morning. The traded volume at NYMEX is slightly above average at this time of day. Investors are waiting for the European financial and forex markets to open and for the release of some economic indicators. Moreover, they are eying the Baker Hughes report on active US oil rigs. This report is only due in the evening, however.

Houston (ex-wharf indications 24-7)
380cst $292
180cst $466
MGO $522

New Orleans (ex-wharf indications 24-7)
380cst $302
180cst $369
MGO $510

Singapore (delivered indications 24-7)

WTI is bearish with -$0.91. Singapore paper is down with -$4.25 for 180cst up with -$4.00 for 380cst for Aug, and for Sep 180 cst -$4.35 and 380cst with -$5.00 with MGO contracts Aug losing with -$0.80 and in Sep with -$0.81. The cargo market is bearish with 180cst -$3.75, 380cst with -$2.03 and MGO with -$0.39.

380cst $297
180cst $309
MGO $472

Fujairah (delivered indications 24-7)

380cst $316
180cst $339
MGO $729

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $283
MGO 0.1%S: $473