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Crude oil prices dropped in Asia this morning as investors brushed off manufacturing PMI surveys out of China for signals on demand and waited rig count data from the U.S. services firm Baker Hughes.

Market fundamentals as well as the technical constellation were bearish Thursday morning. The short-term downtrends provided some upward potential which oil futures seized in the course of the day. Despite a report published by news agency Reuters according to which OPEC output increased by 0.1 mbpd in March, oil futures gained ground. They were bolstered by the steadier Euro/Dollar. The Euro climbed up to 1.14 USD. The fact that Brent (May), NYMEX Gasoline and NYMEX Heating Oil (April) expired Thursday evening added to volatility and so oil futures saw larger price swings Thursday afternoon and in the evening. Moreover, analysts raised their 2016 price forecasts for Brent and WTI, favouring a rise. In the evening, data provider Genscape reported that crude oil inventories in Cushing, Oklahoma, had dropped by 800,000 bpd from last Friday to Tuesday. Gasoil, Brent and WTI seized their upward potential within the downtrends, testing the 7-period moving average which limited gains. After having bounced off from this marker, oil futures lost ground overnight, the more so as Libya announced to resume oil exports from its most important terminals.

ICE Gasoil contract for April delivery settled at 355.00 USD on Thursday, this was 3.75 USD above Wednesday's settlement. With some 42,300 deals, the traded volume (front month) was below average.

After having been bearish on Thursday, the Stochastic indicator is giving off contradictory signals this morning. At the Brent chart the indicator is already bullish. However, this signal might as well be skewed given the expiry of the May contract Thursday evening. At the Gasoil chart the indicator is bullish as well, though. At the WTI chart, the Stochastic indicator hasn't given off a buying signal yet. Oil futures are still trading within a downtrend below the 7-period moving average which serves as an important resistance. When the 7-period moving average and the 21-period moving average crossed on Thursday, a selling signal was generated which is still weighing on oil futures today. The Stochastic indicator might also give off a buying signal at the WTI chart and the RSI might turn bullish at ICE charts if it surpasses 30%. However, the 7-period moving average remains strong, limiting the upward potential. If oil futures sustainably break above the 7-period moving average, they might quickly approach the 21-period moving average as the Stochastic is then likely to give off a buying signal at the WTI chart. Since the signals are not yet homogenous, the resistances are still strong and the 7-period moving average and the 21-period moving have a bearish impact, we assess the technical constellation as neutral.

U.S.

Nymex above average: Oil futures tested their supports in Asian trading but regained ground in Globex electronic trade this morning. The traded volume at NYMEX is above average this morning. Investors are now waiting for the European financial and forex MARKETS to open as well as for the release of some economic indicators due today. The monthly data on the US labour market will be in focus.

Houston (ex-wharf indications 1-4)
380cst $157
180cst $272
MGO $357

New Orleans (ex-wharf indications 1-4)
380cst $169
180cst $213
MGO $354

Singapore (delivered indications 1-4)

Brent is bullishh with -$0.77 for Apr contracts. Singapore paper is down with -$5.40 for 180cst with -$5.50 for 380cst for Apr, and for May 180cst -$5.50 and 380cst with -$5.00 with MGO contracts Apr with -$0.60 and in May with -$0.65.The cargo market is down with 180cst +$0.66, 380cst with +$1.89 and MGO with -$0.07..

380cst $179
180cst $185
MGO $334

Fujairah (delivered indications 31-3)

380cst $182
180cst $191
MGO $420

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $165
MGO 0.1%S: $333