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Oil prices resumed their decline this morning, one day after bouncing off seven-year lows, as worries that a global supply glut may stick around for longer than anticipated continued to weigh.

The market environment for oil futures at ICE and NYMEX had already been bearish at the beginning of European trading. In terms of market fundamentals there were no reasons for a sharp rise in oil prices and so, market players shrugged off the decline in the number of active US oil rigs reported Friday evening by Baker Hughes. Although oil futures moved in deeply oversold territory, the technical constellation indicated further downward potential when the futures tested Friday's lows. As soon as prices dropped below these levels in the early afternoon, selling pressure increased. Oil futures lost considerable ground, keeping track of WTI's decline. The US crude oil sort hit a price target - at 34.53 USD - which was set by a long-term support. The market renewedly showed on Monday that speculators are holding a significant amount of short-positions. However, this raises the risk of an upward correction. When WTI hit its price target in late-afternoon trade, oil futures saw a slight upward correction as some investors covered their short-positions. Oil futures, particularly WTI, regained ground. The possibility of the export ban on US crude oil, which had lasted for 40 years, made oil markets more volatile, providing some upward momentum. The US crude oil sort even ended the day with some gains, whereas the upward correction but limited Gasoil's losses.

ICE Gasoil contract for January delivery settled at 331.25 USD on Monday, this is -12.00 USD below Friday's settlement. With some 89,100 deals, the traded volume (front month) was above average.

The lines of the Stochastic indicator have meanwhile crossed at the Brent and the WTI chart. The indicator has thus given off buying signals. Along with the WTI's rebound from its key support near 34.45 and 34.50 USD , these buying signals favour tests of the upside. However, the RSI is still moving below 30% up to now, not confirming the buying signal of the Stochastic indicator so far. If the RSI surpasses 30% in the course of the day, the possible technical upward move would gain traction. There is some upward potential at oil markets indeed which is why we assess the technical constellation as neutral to bullish.

U.S.

Nymex is above average: Oil futures in London and New York are currently trading in a narrow range in electronic trade this morning after having seen a light upward correction on Monday evening. The supports near these lows haven't been breached so far. Only the NYMEX Gasoline contract has gained ground. The traded volume at NYMEX is slightly above average this morning. Investors are waiting for the European financial and forex markets to open today as well as for the release of several economic indicators out of the Eurozone and the USA. Besides, they will eye the release of the API's data on US crude oil inventories which is due at 10.30 p.m. this evening.

Houston (ex-wharf indications 15-12)
380cst $158
180cst $230
MGO $394

New Orleans (ex-wharf indications 15-12)
380cst $169
180cst $228
MGO $389

Singapore (delivered indications 15-12)

Brent is down with -$0.24 for December contracts. Singapore paper is down with -$3.50 for 180cst with -$4.00 for 380cst for Dec, and for Jan 180 cst -$4.25 and 380cst with -$4.35 with MGO contracts Dec with -$1.60 and in Jan with -$1.30.The cargo market is bearish with 180cst -$8.24, 380cst with -$9.90 and MGO with -$1.99.

380cst $173
180cst $192
MGO $358

Fujairah (delivered indications 15-12)

380cst $171
180cst $198
MGO $579

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $153
MGO 0.1%S: $318