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Oil prices dropped this morning despite a fall in U.S. drilling activity for the fourth straight week, with analysts pointing to a poor economic growth outlook as the main reason for low crude prices.

ICE and NYMEX futures traded in a narrow range in European trading hours on Friday, timidly trying their upside in a market lacking direction. The solid short term resistance lines at the ICE limited oil's gains and the WTI tried in vain to breach its 45.40 dollar resistance. The fact that Standard & Poor's had revised down its price forecasts for Brent and WTI is a strongly bearish factor while Genscape's forecast of another draw in Cushing crude stocks supported the oil market. Only with the opening of NYMEX session oil prices managed to breach their resistance lines, driven by better-than-expected U.S. indicators and Wall Street's strong increase. But the recovery was short-lived, the strong resistance lines of the 46.30 USD WTI and the 475.00 USD gasoil limiting the gains as traders took the chance to take some profit in order to limit their risk positions ahead of the week-end. Oil prices thus settled little changed vs their opening course in a volatile market that got some support in late trading by a Baker Hughes report announcing another drop in active U.S. oil rigs.

ICE Gasoil contract for October delivery settled at 467.00 USD on Friday, this is 1.75 USD above Thursday's settlement. With some 63,200 deals the traded volume (front month) was above average.

The technical indicators have not produced any fresh signals this morning while oil futures keep trading in a lateral range all the while. The Stochastic indicator at the Brent and the gasoil chart could trigger a buying signal should its two lines cross. If such a signal has already been produced at the WTI chart a solid resistance line at 46.45 USD limits the contract's upside, the more as the 7-day and 21-day moving average lines have crossed and triggered a selling signal. But as long as no fresh signals are being triggered prices at ICE and NYMEX will be stuck within their lateral range. We assess the technical constellation therefore as neutral today.

U.S.

Nymex on average : Oil futures are sligthly lower in Asian trading hours and Globex electronic trading this morning, weighed down by the steep drop of U.S. equity markets and the pessimistic comments of Christine Lagarde, chief of the IMF, on global economic growth. The traded volume at NYMEX is about on average this morning. Investors are now waiting for the European financial and forex markets to open and for the release of only a few economic indicators in the U.S.

Houston (ex-wharf indications 28-9)
380cst $221
180cst $266
MGO $472

New Orleans (ex-wharf indications 28-9)
380cst $233
180cst $282
MGO $459

Singapore (delivered indications 28-9)

Brent is gaining with +$0.06. Singapore paper dropping with -$0.50 for 180cst with -$2.00 for 380cst for Oct, and for Nov 180 cst -$0.70 and 380cst with -$1.45 with MGO contracts Oct losing with -$1.45 and in Nov with -$1.43. The cargo market is gaining with 180cst +$11.38, 380cst with +$9.82 and MGO with +$2.15.

380cst $229
180cst $245
MGO $438

Fujairah (delivered indications 28-9)

380cst $237
180cst $256
MGO $528

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $218
MGO 0.1%S: $433