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Crude oil prices slumped in Asia, edging below $41 a barrel as a disappointing flash PMI from key importer China hit sentiment on demand prospects.

Oil futures declined on Thursday morning, weighed down by the bearish technical constellation and market fundamentals. WTI came under more pressure after the contract approached the 40 USD threshold. Whilst the glut in global crude oil supplies and the rise in US crude oil stocks reported by the DOE pushed oil prices lower, WTI remained above 40 USD, though. As we had already announced in our early morning news, the WTI contract with September delivery expired on Thursday evening which is why traders covered some of their short-positions in the course of the day. The buying that resulted from this short-covering prevented further losses in the afternoon. Moreover, oil prices were supported by news on the first hurricane of the season having formed over the Atlantic. Besides, Algeria's oil minister asked OPEC to react on the renewed price decline. However, these news failed to cause a sustainable upward correction as the overall situation remained bearish. A Texas City refinery faced some problems as a flash had hit a transformer. If production is interrupted, it would dent crude oil demand as well. After the expiry of the WTI contract with September delivery short-covering ebbed and so oil futures kept track of their losses over night, the more so as the losses at stock markets provided bearish cues as well.

ICE Gasoil contract for September delivery settled at 460.75 USD on Thursday, this is -2.25 USD below Wednesday's settlement. With some 75,100 deals the traded volume (front month) was far above average.

The Stochastic indicator and the RSI are neutral at ICE and NYMEX charts this morning. The Stochastic indicator might give another selling signal at the WTI chart but such a signal would only be generated if the lines of the indicator sustainably cross. WTI's downtrend is still intact, favouring further downward moves. Brent and Gasoil prices have already hit fresh long-term-lows overnight. Since there are no technical cues this morning, Thursday's lows are key supports which limit the downside. We assess the technical constellation as neutral this morning but if oil futures drop below Thursday's lows or if the Stochastic indicator gives a selling signal at the WTI chart, technical selling pressure is likely to increase, so the technical constellation would turn bearish in the short-term.

U.S.

Nymex on average: After having lost some ground in Asian and electronic trading this morning on weaker stock markets and a disappointing Chinese purchasing manager index, oil futures have regained some ground lately. The traded NYMEX volume is 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. Moreover, Baker Hughes will release its report on active US oil rigs this evening.

Houston (ex-wharf indications 21-8)
380cst $227
180cst $384
MGO $481

New Orleans (ex-wharf indications 21-8)
380cst $248
180cst $305
MGO $470

Singapore (delivered indications 21-8)

WTI is bearish with -$0.75. Singapore paper is down with -$7.75. for 180cst with -$7.25 for 380cst for Sep, and for Oct 180 cst -$6.75 and 380cst with -$6.70 with MGO contracts Sep losing with -$0.82 and in Oct with -$0.83. The cargo market is bearish with 180cst -$12.51, 380cst with -$11.02 and MGO with -$2.00.

380cst $231
180cst $238
MGO $423

Fujairah (delivered indications 21-8)

380cst $245
180cst $282
MGO $599

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $228
MGO 0.1%S: $423