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Oil futures extended losses from the prior session this morning, as ongoing worries over the health of the global economy fueled concerns that a global supply glut may stick around for longer than anticipated.

On the last trading day of a volatile week, oil futures kicked off near Thursday's settlement levels. As expected the traded volume remained low as many market participants had already headed off for the long weekend. After China celebrated a national holiday on Friday, the Labour Day holiday is celebrated in the USA today. Consequently, investors avoided new risk positions rather tending to cut some of their long positions after oil futures had rallied at the beginning of last week. Technical triangles have meanwhile established at ICE and NYMEX charts, limiting the up- and downward potential at oil markets. Moreover, oil futures found strong support near the MA 7. Inspite of the light profit taking oil futures saw on Friday, losses were thus limited, the more so as the US labour market data (released in the afternoon) failed to give oil markets a clear direction. The data added to volatility on the market but it didn't provide any clear cues. Several analysts cut their price forecasts, reacting on the persistently bearish market situation. On Friday evening, after our submission deadline, Baker Hughes released its weekly report on the number of active US rig counts. This number declined, briefly supporting oil prices ahead of the weekend. However, profit taking prevailed and so oil futures at ICE and NYMEX dropped below the MA 7. Eventually, oil futures settled with fresh lows.

ICE Gasoil contract for September delivery settled at 485.00 USD on Friday, this is -10.25 USD below Thursday's settlement. With some 39,400 deals the traded volume (front month) was clearly below average.

Oil futures at ICE and NYMEX charts have already broken below the MA 7, generating fresh downward potential. So far, the technical triangles are still intact, however, limiting oil futures' up- and downward slack. The RSI is still in overbought territory, not giving any clear signal yet. The Stochastic indicator is neutral as well. If the RSI sustainably drops below 70%, there would be a clear selling signal. However, the technical triangles might be crucial, too. If oil futures break out of these triangles, there will be a considerable up- or downward move. For now, we are thus assessing the technical constellation as neutral. The cues mentioned above (RSI or technical triangle) would trigger technical sell-off, though.

U.S.

Nymex above average: Oil futures lost some ground overnight, having dropped far below Friday's lows. Even though prices have slightly recovered since, they are still trading below Friday's lowest levels. 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 data on Germany's industrial production. Due to the holiday in the USA, traded volumes are likely to remain rather low this Monday.

Houston (ex-wharf indications 7-9)
380cst $247
180cst $347
MGO $503

New Orleans (ex-wharf indications 7-9)
380cst $257
180cst $315
MGO $483

Singapore (delivered indications 7-9)

380cst $250
180cst $258
MGO $458

Fujairah (delivered indications 7-9)

380cst $250
180cst $287
MGO $599

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $243
MGO 0.1%S: $453