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Oil fell this morning, as rising output from the Middle East and North Sea renewed concerns about a global supply overhang.

Market fundamentals and the technical constellation pointed to some downward potential at oil charts at the beginning of this week. Along with the selling signals provided by the technical constellation, the rise in OPEC oil production, increasing exports from Iraq and disappointing economic data out of China favoured tests of the downside. After having retreated in the morning, oil futures slightly recovered in the early afternoon. However, later on Monday they approached their key-supports near the 7-period moving average. Even though Russia's oil production slightly decreased in April, the country's oil exports increased. Disappointing economic data out of the USA failed to improve investor sentiment. In the UK, traders were absent due to the May Day holiday which is why the traded volume was very low. From a technical perspective, the RSI at the WTI chart and the Stochastic indicator at the Gasoil chart confirmed earlier selling signals. The bearish factors eventually outweighed the bullish ones and so oil prices dropped down to the 7-period moving averages, ending the day with considerable losses.

ICE Gasoil contract for May delivery settled at 410.25 USD on Monday, this was 2.75 USD below Friday's settlement. With some 13,900 deals, the traded volume (front month) was far below average.

Tuesday 3rd May Oil fell this morning, as rising output from the Middle East and North Sea renewed concerns about a global supply overhang. Market fundamentals and the technical constellation pointed to some downward potential at oil charts at the beginning of this week. Along with the selling signals provided by the technical constellation, the rise in OPEC oil production, increasing exports from Iraq and disappointing economic data out of China favoured tests of the downside. After having retreated in the morning, oil futures slightly recovered in the early afternoon. However, later on Monday they approached their key-supports near the 7-period moving average. Even though Russia's oil production slightly decreased in April, the country's oil exports increased. Disappointing economic data out of the USA failed to improve investor sentiment. In the UK, traders were absent due to the May Day holiday which is why the traded volume was very low. From a technical perspective, the RSI at the WTI chart and the Stochastic indicator at the Gasoil chart confirmed earlier selling signals. The bearish factors eventually outweighed the bullish ones and so oil prices dropped down to the 7-period moving averages, ending the day with considerable losses. ICE Gasoil contract for May delivery settled at 410.25 USD on Monday, this was 2.75 USD below Friday's settlement. With some 13,900 deals, the traded volume (front month) was far below average. The selling signals which had already existed on Monday morning were confirmed in the course of the day by the additional selling signals of the Stochastic indicator at the Gasoil chart and of the RSI at the WTI chart. The bearish constellation has led to a downward move during which the ICE futures broke below important supports and the 7-period moving average. WTI also tested the 7-period moving average but failed to sustainably break it. The Stochastic indicator and the RSI remain bearish, pointing to more downward potential - although a part of the bearish potential has already been spent by Monday's price drop. At the WTI chart some of the supports are still intact which is why the short-term downtrend can't be considered broken yet. Monday's downward move thus was but a correction within a trend. If oil futures renewedly settle below the 7-period moving average today, they might test the 21-period moving average. Given the still bearish indicators and the intact uptrend of WTI, we are currently assessing the technical constellation as "merely" neutral to bearish.

U.S.

Nymex above average: Oil futures made up for some of Monday's losses in East Asia and in Globex electronic trade this morning. However, they are still trading well below Monday morning's levels. The traded volume at NYMEX is about on average this morning. Investors are waiting for the European financial and forex markets to open as well as for the economic indicators due today. Besides, the API will release its data on US oil inventories at 10.30 p.m.

Houston (ex-wharf indications 3-5)
380cst $201
180cst $311
MGO $413

New Orleans (ex-wharf indications 3-5)
380cst $211
180cst $250
MGO $409

Singapore (delivered indications 3-5)

380cst $226
180cst $32
MGO $410

Fujairah (delivered indications 3-5)

380cst $233
180cst $237
MGO $439

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $218
MGO 0.1%S: $403