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Growing concerns over demand from China and Japan sent crude oil prices down this morning in Asia as investors also noted a major industrial accident last week in the Chinese port city of Tianjin may also disrupt economic activity for a considerable period as clean-up gets underway.

Whilst market fundamentals were still bearish on Friday morning, the technical constellation was neutral for oil futures as it provided ambiguous cues. Thursday night, WTI hit a fresh 6.5-year-low, indicating more downward potential but the Stochastic indicator hadn't provided any selling signals yet. After having tested its downside on Friday morning, Gasoil eventually broke below its support at 476.25 USD, which was the lower limit of the corrective trend. The lines of the Stochastic indicator crossed at the Gasoil charts first, generating a selling signal. In the evening, this selling signal was confirmed at the Brent chart and so technical selling pressure increased. However, the downward potential remained limited ahead of the release of the Baker Hughes rig count and the expiry of the September Brent contract later on Friday evening. According to Baker Hughes, the number of active US oil rigs increased for the fourth consecutive week. Along with the expiry of the front month Brent contract at 8.30. p.m., this prompted investors to raise their short positions. Eventually, futures ICE ended the day hitting fresh lows.

ICE Gasoil contract for September delivery settled at 474.50 USD on Friday, this is -1.25 USD below Thursday's settlement. With some 61,700 deals the traded volume (front month) was far above average.

Both Brent and Gasoil have meanwhile dropped below their short-term corrective uptrends. Moreover, the lines of the Stochastic indicator have crossed, giving fresh selling signals whereas the indicator is still neutral at the WTI chart. At the WTI chart, the downtrend remains intact whereas the selling signals of the indicator point to tests of the downside at the Brent and the Gasoil charts. Brent might find strong support at 48.25 USD, that is last week's low. Given the selling signals of the Stochastic indicator, we assess the situation as neutral to bearish, the more so as ICE futures have already dropped below Friday's lows.

U.S.

Nymex above average: Oil futures at ICE have already broken below Friday's lows in the early morning. Even so, they have been trading near these levels ever since without showing any larger downward move. The traded NYMEX volume is clearly above average at this time of day. Market participants are now waiting for the European financial and forex markets to open as well as for the release of some economic indicators.

Houston (ex-wharf indications 17-8)
380cst $235
180cst $376
MGO $486

New Orleans (ex-wharf indications 17-8)
380cst $260
180cst $320
MGO $478

Singapore (delivered indications 17-8)

WTI is bullish with +$0.18. Singapore paper is down with -$4.25. for 180cst down with -$5.00 for 380cst for Aug, and for Sep 180 cst -$4.25 and 380cst with -$4.90 with MGO contracts Aug losing with -$0.70 and in Sep with -$0.70. The cargo market is bearish with 180cst -$7.47, 380cst with -$5.56 and MGO with -$1.89.

380cst $251
180cst $265
MGO $434

Fujairah (delivered indications 17-8)

380cst $268
180cst $305
MGO $655

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $235
MGO 0.1%S: $441