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Crude oil futures edged up on light bargain hunting this morning, after U.S. and Brent crude tumbled in the previous session to post their biggest daily percentage declines since the start of September.

Oil futures tended to the upside on Monday morning bolstered by slightly bullish market fundamentals. The monthly energy report released by the OPEC in the early afternoon provided some bullish cues as it forecast a tighter than expected market. However, the resistances at 50.10 USD WTI and 53.20 USD Brent remained strong. According to analysts like John Saucer at Mobius Risk Group, traders on the physical market start selling their scheduled production on options markets as soon as prices climb above 50 USD - in order to ensure a certain price level. Technically, oil futures already moved in overbought territory in the morning, the more so as WTI hovered above the upper Bollinger Band, indicating that upward potential was limited and that investors would take some profits. As a consequence, oil prices increasingly lost ground in the afternoon, with market players focusing on OPEC output which had climbed to a three-year-high of 31.57 mbpd in September. As we had already forecast in our technical analysis on Monday morning, the Stochastic indicator and the RSI generated selling signals which added to the technical selling pressure. The reports regarding a sharp rise in Cushing crude oil stockpiles brought even more bearish cues. At the end of the day, oil futures marked considerable losses. Futures shed most of last week's gains settling near their lows.

ICE Gasoil contract for October delivery settled at 476.25 USD on Monday, this is -10.25 USD below Friday's settlement. With some 139,800 deals the traded volume (front month) was far above average.

The RSI dropped below 70% at the WTI and at the Brent chart, confirming the selling signal that had already existed at the Gasoil chart on Monday morning. The lines of the Stochastic indicator crossed as well, giving yet another selling signal at ICE and NYMEX charts, the more so as the indicator has meanwhile also fallen below 50%. By losing ground, WTI not only dropped back below the upper Bollinger Band but also below the 7-period moving average which has become an important resistance. If oil futures remain below the MA7, they might move sideways or extend their losses. However, an uptrend between the upper Bollinger Band and the MA7 might establish if the resistance is sustainably breached. Due to the clear selling signals provided by the Stochastic indicator and the RSI, this is rather unlikely, though. Even though Monday's price slump spent most of the downward potential, the technical constellation should be assessed as bearish.

U.S.

Nymex above average : Oil futures have slightly pulled back from last night’s lows in electronic trading this morning. However, they remain range bound on a low level. The disappointing Chinese indicators might make oil futures test their supports once again. The traded volume at NYMEX is on average this morning. Investors are now waiting for the European financial and forex markets to open and for the economic indicators which are due today. Due to the US holiday on Monday, the API's report on oil inventories will only be released on Wednesday night.

Houston (ex-wharf indications 13-10)
380cst $242
180cst $299
MGO $514

New Orleans (ex-wharf indications 13-10)
380cst $253
180cst $305
MGO $506

Singapore (delivered indications 13-10)

380cst $246
180cst $263
MGO $458

Fujairah (delivered indications 13-10)

380cst $261
180cst $285
MGO $610

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $238
MGO 0.1%S: $448