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WTI oil futures rebounded from the previous session's steep declines this morning, amid indications U.S. oil drillers are cutting back on production following a collapse in prices over the summer.

After the FOMC on Thursday had decided to leave its benchmark interest rates unchanged, traders on Friday were monitoring whether the bearish or the bullish factors would prevail. At first, oil futures tended to the upside as a softer dollar makes oil, which is priced in dollar, cheaper for investors outside the USA, fostering price levels. At the open of European stock markets, the traded volume at oil markets increased. However, the decline in equities called to mind the bearish aspects of the Fed's decision. The economic problems which prompted the Fed to leave its interest rates unchanged might also slow down oil demand growth. Traders increasingly put their capital in safer assets. This weighed on riskier assets like equities and oil. When the euro/dollar in the afternoon shed more and more of the gains it had posted earlier last week, selling pressure at oil markets increased. As to the technical constellation, the break below the technical triangles at the ICE charts added to selling pressure, the more so as Brent also breached its supports near the MA 7 and the MA 21. Late in the afternoon, the fact that the lines of the Stochastic indicator crossed provided yet another selling signal. Oil futures thus ended the day clearly in the red, despite Baker Hughes' bullish rig count.

ICE Gasoil contract for October delivery settled at 463.25 USD on Friday, this is -4.50 USD below Thursday's settlement. With some 68,800 deals the traded volume (front month) was above average.

The lines of the moving averages have crossed at the Gasoil and the Brent chart, generating a selling signal. At the WTI charts the moving averages have not given a bearish signal yet. However, the lines of the Stochastic indicator have sustainably crossed at ICE and at NYMEX charts, giving a bearish signal as well. The MA 21 has become a very strong support for WTI, limiting downward potential in September effectively. If this line is sustainably breached, selling pressure would increase even though the technical constellation is already bearish due to the other selling signals.

U.S.

Nymex above average : After Friday evening's losses, oil futures were buoyed by short-covering in Asian and electronic trading this morning. However, there haven't been any larger price moves, yet. The traded volume at NYMEX is slightly above average this morning, with traders getting prepared for the change in the WTI front month. Market participants are now waiting for the European financial and forex markets to open and for some economic indicators that are on the agenda today.

Houston (ex-wharf indications 21-9)
380cst $229
180cst $270
MGO $491

New Orleans (ex-wharf indications 21-9)
380cst $238
180cst $293
MGO $480

Singapore (delivered indications 21-9)

WTI is bullish down -$1.40. Singapore paper is down with -$10.25 for 180cst with -$9.80 for 380cst for Oct, and for Nov 180 cst -$10.25 and 380cst with -$10.05 with MGO contracts Oct losing with -$1.25 and in Nov with -$1.20. The cargo market is bearish with 180cst -$1.59, 380cst with -$2.18 and MGO with -$0.33sky.

380cst $232
180cst $243
MGO $440

Fujairah (delivered indications 18-9)

380cst $236
180cst $253
MGO $519

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $218
MGO 0.1%S: $431