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Oil prices were modestly lower in quiet European trade this morning, as a broadly stronger U.S. dollar prompted market players to lock in gains from a recent rally which took prices above the key $50-level.

On Friday morning, the bearish technical constellation indicated more profit taking at oil markets, the more so as oil futures had failed to sustainably break above 50 USD on Thursday. In the course of Friday morning, oil futures tested and breached their supports. Earlier last week, analysts at Goldman Sachs and Citigroup had upwardly revised their price forecasts for crude oil. That is why a forecast of UBS analysts took market players by surprise. They said that the price of a barrel of crude oil might fall to 40 USD if the OPEC members decided to raise their output in the summer months. However, the OPEC members will only meet later this week (June 2). Friday afternoon, investors were still awaiting the release of the Baker Hughes rig count as well as Janet Yellen's statement on the FOMC's monetary policy. The report and the statement were due in the evening. Besides, investors avoided riskier transactions ahead of the long weekend in the USA which is why oil futures didn't post any larger losses. The Baker Hughes rig count eventually showed that the number of active US oil rigs decreased by 2. Apart from this, Janet Yellen didn't provide any fresh hints on a rate hike in June. Crude oil and gasoline futures thus ended the day with fresh highs whereas heating oil remained below the highs they had reached in late afternoon trade.

ICE Gasoil contract for June delivery settled at 448.50 USD on Friday, this was 0.25 USD above Thursday's settlement. With some 33,400 deals, the traded volume (front month) was below average.

By dropping below 70%, the RSI gave off selling signals last week. Meanwhile, the indicator has lost some of its bearish impact. However, the lines of the Stochastic indicator have crossed. Although the Stochastic indicator had already been slightly bearish on Friday, Friday evening's price increase neutralized its bearish influence. That is why the indicator gave off a renewed selling signal earlier this morning when its lines crossed. At the moment, oil futures in London and New York remain above the 7-period moving average which is a key-support. If oil futures sustainably break below this marker, fresh selling orders might be triggered. This would add to selling pressure from a technical point of view. Due to the selling signal of the Stochastic indicator, the technical constellation can be considered neutral to bearish.

U.S.

Nymex on Average: Crude oil futures reached new highs in East Asia but shed some of those gains in NYMEX electronic trading this morning. The traded volume at NYMEX is about on average this morning. Investors are waiting for the European financial and forex markets to open and for the release of some of economic indicators out of the Eurozone. They are also awaiting news on output losses in Canada and Nigeria and on the strikes in France.

Houston (ex-wharf indications 30-5)
380cst $223
180cst $321
MGO $466

New Orleans (ex-wharf indications 30-5)
380cst $231
180cst $277
MGO $448

Singapore (delivered indications 26-5)

380cst $231
180cst $238
MGO $439

Fujairah (delivered indications 26-5)

380cst $242
180cst $247
MGO $489

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $223
MGO 0.1%S: $423