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Technical indicators: bearish

Oil prices are still in a solid, short-term downtrend after support lines were breached Wednesday and prices fell through the lower limit of the medium-term uptrend. The RSI remains in neutral territory and the Stochastic indicator signals a consolidation. First WTI crude support line seen at 73.80 dollars today, first resistance line at 75.80 dollars (the upper limit of the existing downtrend, see chart below). Oil prices have decoupled from the dollar and seem to follow the technical constellation and economy data. The high builds in US oil stocks have discouraged traders for the time being. The bulls must look for hints of a quick economic recovery which will be hard to find these days.

Analysts see oil prices ease a bit more today, possibly as low as the first support for the WTI crude at 73.80 dollars. Oil prices expectably fell last night after the Department of Energy reported an increase in U.S. crude and product stockpiles despite the eight day-long shutdown of the biggest Canadian pipeline shipping crude to the U.S.

ICE Gasoil October is expected to open -0,50 to +1,00 dollars at about 670,25 dollars/ton after settling at 670,00 dollars (official settlement price) Wednesday night. This was 10,25 dollars below Tuesday's settlement. Volume with some 64.900 deals above average.

The crack-spread between ICE brent November contract and the WTI crude widened by more than 3.00 dollars, the widest spread since October 2008. Main reason is the ailing US oil demand compared with a rather healthy oil consumption in Europe.

U.S.

Nymex Access : Oil prices are flat in Asian trading hours and NYMEX electronic trading this morning, WTI crude lingering below 75.00 dollars a barrel, looking for direction after Wednesday's losses. No news in the markets. The traded volume is above average. Market participants eye key US jobs and housing reports later in the day.

APIs: crude oil +2.231; distillates +2.509, gasoline 02.422 million barrels vs previous week. Refinery utilization -0.2%

DOEs: crude oil +0.970; distillates; +0.347, gasoline +1.590 million barrels vs previous week. Refinery utilazation +0.2%

Forecasts: -1,5; distillates +0.1; gasoline 0.0 million barrels vs previous week. Refinery utilization: -0.5

Houston (ex-wharf indications 23-9)

380cst: $432
180cst: $452
MGO: $715
Very tight avails for 180cst

New Orleans (ex-wharf indications 23-9)

380cst: $435
180cst: $455
MGO: $718

Singapore (correct as of 1430hrs local time)

Crude is losing further albeit slowing in its losses with WTI -$0.40. Singapore paper is reflecting this with 180cst -$2.30 and 380cst -$1.25 for Oct, and Nov 180 cst -$2.30 and 380cst -$1.00 with MGO Oct contracts -$0.73 and for Nov at -$0.69. The cargo market is now adopting the drops with 180cst -$3.37, 380cst -$3.22 and MGO -$1.00.

Singapore fuel oil price lost more than $3.0 yesterday during the Platts window yesterday. The delivered bunker premiums were app. $0.5 above the cargo yesterday as bunker demand remains relatively weak. There are heavy supplies incoming to Singapore in October. Several Asian countries like China, Hong Kong, Taiwan and South Korea are closed for holidays. This morning, fuel is trading down.

High premiums for prompt deliveries:

380cst: $440
180cst: $447
MGO: $657

Fujairah (delivered indications 23/9)

380cst: $447
180cst: $470
MGO: $730

Rotterdam

Yesterday (Only barge trade deals of >2 KT reported) only 10KT was traded in the MOC between 424.00-426.50 with Mercuria as the main seller to NSGBunk and Totsa as the main buyers.

The fuel oil hi-lo differential shed $10.25/mt over the past week to be assessed at $12.50/mt Wednesday, Platts data showed. Market sources said it was largely a heavy LSFO cargo market weighing on the differential. The Amsterdam-Rotterdam-Antwerp region recently saw healthy volumes of ex-US barrels coming in. Shell had a cargo arriving from the US into Northwest Europe September 27-29, sources reported. US oil is coming despite a closed arbitrage due to a lack of potential other outlets with local demand not enough. Amidst talk that an arbitrage from NWE to the US for LSFO might be workable if New York continues.

At the same time, the widening contango structure on LSFO market was leading traders to hold product in storage, although one trader said the contango would need to steepen by at least about $4/mt to meet ARA storage costs. Sources in the high sulfur fuel oil NWE market expected it to begin softening as the arbitrage vessel fixtures heading to Singapore finished loading. Sources said however they did not expect a drastic swing in market structure. The Mediterranean HSFO market continued to be weighed down by healthy supply with little imminent demand. In the Platts Market on Close assessment process, however, saw a bunker specification cargo offered by Galaxy being booked by Liaoil.

380cst: $429
(1.0%): $447
180cst: $446
(1.0%): $464
DMB: N/A
MGO 0.1%S: $675