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Oil prices extended gains from the prior session this morning, after France launched another set of air strikes on the Islamic State stronghold of Raqqa in Syria, underlining concerns over a disruption to supplies from the region.

After the terrorist attacks in Paris on Friday oil prices increased on a rising risk premium but could not extend their gains on Monday morning at the ICE. The gasoil contract's first resistance and Brent's second resistance limited the gains while the WTI at the NYMEX rose much faster, reducing the price difference to the Brent contract (Brent-WTI spread). Most analysts see the influence of the terrorist attacks on the oil market as limited as Paris' military intervention in Syria is not expected to reduce the oil supply in the region. At the beginning of the session in New York the known bearish fundamentals (record stocks in OECD countries, overproduction and increasing number of active U.S. oil rigs) won the upper hand and prices started to lose ground. When the futures at the ICE fell below their Friday's lows, oil's slide was accelerated. When Genscape later in the evening released its forecast of an increase in Cushing crude stocks the gasoil contract even hit a 6.5 year low. At 5.30 p.m., the former settlement time of the gasoil contract, prices suddenly rebounded on technical movements in a market lacking any fundamental bullish news. The WTI could not breach its 40 dollar key support and the Stochastic indicator triggered buying signals at all charts, tempting traders to cover their short positions. Oil prices thus compensated almost all of its earlier losses and ended the session almost unchanged vs the opening.

ICE Gasoil contract for November delivery settled at 415.00 USD on Monday, this is 11.25 USD below Friday's settlement. With some 83.100 deals the traded volume (front month) was well above average.

The Stochastic on Monday triggered fresh buying signals at ICE and NYMEX that have meanwhile been partly absorbed by oil's late but strong rise. The RSI is still at the oversold level and not able to breach the 30 line, so it has not triggered any signals yet. Oil futures at ICE and NYMEX meanwhile climbed back above their lower Bollinger bands that match the lower limits of the downtrends. Oil's margin today is thus between the 7-day moving average lines, the upper limits of the downtrends, and the lower Bollinger bands that match the 40.60 USD (WTI) and the 43.60 USD (Brent). In addition to that the WTI has an important psychological support at 40 USD today that limited oil's losses on Monday. The Stochastic indicator meanwhile has lost part of its bullish influence on Brent and gasoil. Only at the WTI chart it is still seen bullish as its two lines are diverging. We therefore consider the technical constellation as neutral to bullish this morning but like to point out that the downtrends will stay intact as long as the 7-day MA is strong.

U.S.

Nymex is above average: Oil futures consolidated Monday's gains in East-Asia and Globex electronic trade this morning, traders being cautious in a volatile market after the terrorist attacks in Paris. The traded volume at NYMEX is well above average this morning. Investors are waiting for the European financial and forex markets to open today and for the release of a series of important economic indicators. They will also eye the API's report on U.S. petroleum stocks, released as usual tonight at 10.30 p.m.

Houston (ex-wharf indications 17-11)
380cst $207
180cst $296
MGO $464

New Orleans (ex-wharf indications 17-11)
380cst $215
180cst $258
MGO $450

Singapore (delivered indications 17-11)

Brent is gaining with +$0.04 for December contracts. Singapore paper is up with +$1.50 for 180cst with +$2.20 for 380cst for Dec, and for Jan 180 cst +$1.25 and 380cst with +$1.40 with MGO contracts Dec down with -$0.06 and in Jan with -$0.02. The cargo market is bearish with 180cst -$3.40, 380cst with -$2.76 and MGO with up -$1.07.
380cst $218
180cst $230
MGO $421

Fujairah (delivered indications 17-11)

380cst $223
180cst $259
MGO $604

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $198
MGO 0.1%S: $388