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Crude oil futures fell to the lowest level in more than six years this morning, as steep declines on China's stock market rattled investors' confidence.

Market fundamentals remained bearish on Friday morning. Selling pressure even increased after the Chinese purchasing manager index released by HSBC had fallen short of expectations. Oil prices were also weighed down by the decline at stock markets which pointed to a weaker economic growth. Until the early afternoon, the supports at 40.65 USD WTI, 46.00 USD Brent and 450.00 USD Gasoil had remained strong but after several tests of the downside, they were eventually breached. Whilst investors were waiting for the Baker Hughes report on the number of active US oil rigs, technical selling pressure increased when oil prices dropped below their key-supports. More stop-loss selling orders were triggered and the Stochastic indicator gave a selling signal. Oil futures hit new longterm-lows, the more so as Baker Hughes reported the fifth rise in the number of active US oil rigs on Friday evening (after our submission deadline). Friday night, oil prices consolidated near these lows. This morning, however, they renewedly lost ground when WTI dropped below its key-support at 40.00 USD, triggering another technical sell-off.

ICE Gasoil contract for September delivery settled at 442.75 USD on Friday, this is -18.00 USD below Thursday's settlement. With some 54,700 deals the traded volume (front month) was on average.

Oil futures have already broken below Friday's lows at ICE and NYMEX, generating more downside. At the WTI chart, the downtrend thus remains intact even though the selling signal the Stochastic indicator had given on Friday has meanwhile waned. The Stochastic indicator and the RSI are currently in oversold territory but neutral. They haven't given any buying signals yet. Since the downtrends are still intact, we assess the technical constellation as neutral to bearish.

U.S.

Nymex above average: Oil futures have already dropped below Friday's lows in early electronic trading in London and New York. This has generated more downside. WTI's downtrend thus remains intact even though the selling signal the Stochastic indicator had given on Friday has already waned. The traded NYMEX volume is far above average at this time of day. Investors are now waiting for the European financial and forex markets to open as well as for the release of the Chicago Fed's National Activity index.

Houston (ex-wharf indications 24-8)
380cst $223
180cst $384
MGO $480

New Orleans (ex-wharf indications 24-8)
380cst $238
180cst $298
MGO $466

Singapore (delivered indications 24-8)

WTI is bearish with -$1.95. Singapore paper is down with -$21.00. for 180cst with -$20.50 for 380cst for Sep, and for Oct 180 cst -$20.50 and 380cst with -$18.45 with MGO contracts Sep losing with -$1.92 and in Oct with -$2.06. The cargo market is bearish with 180cst -$7.80, 380cst with -$7.07 and MGO with -$0.58.

380cst $231
180cst $238
MGO $423

Fujairah (delivered indications 24-8)

380cst $240
180cst $282
MGO $599

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $201
MGO 0.1%S: $401