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Technical indicators: neutral to bearish

Oil futures edged up during NYMEX session but eventually declined sharply when NYMEX crude hit its first resistance at 77.20 dollars that proved strong. Due to the lack of any important fundamental news, the technical pressure was strong enough to initiate the selloff. Oil prices edged a bit higher Monday, but 77.20 dollar resistance for the WTI crude stopped the rise and technical selling orders let prices fall below their first support lines. Without important economy data, the technical constellation led the way.

This morning, RSI and Stochastics indicators are rather bearish. First WTI crude support line seen at 75.50 dollars today, first resistance line at 77.00 dollars. Oil prices are seen easing in the morning, possibly as low as 75.50 dollars (WTI crude), marking the first support line. In the afternoon price direction will depend on US consumer confidence index in September. Forecasts of a build in US gasoline stocks also weigh on prices.

ICE Gasoil October is expected to open +2,50 to +3,50 dollars at about 674,25 dollars/ton after settling at 671,25 dollars (official settlement price) Monday night. This was 11,50 dollars below Friday's settlement. Volume with some 45.600 deals on average

U.S.

Nymex Access : Oil prices are easing in Asian trading hours and NYMEX electronic trading this morning, weighed down by the forecast of a considerable build in US gasoline supplies. No news in the markets. The traded volume is below average.

Survey of US petroleum inventories :

crude oil -0.1; distillates +0.4; gasoline +1.1 million barrels vs previous week. Refinery utilization: -0.4%

Houston (ex-wharf indications 27-9)

380cst: $442
180cst: $462
MGO: $722
Very tight avails for 180cst

New Orleans (ex-wharf indications 27-9)

380cst: $444
180cst: $464
MGO: $725

Singapore (correct as of 1430hrs local time)

Crude is losing with WTI -$0.97. Singapore paper is bearish having never really taken up the technical correction on crude with 180cst -$4.55 and 380cst -$3.75 for Oct, and Nov 180 cst -$4.65 and 380cst -$3.90 with MGO Oct contracts -$1.06 and for Nov at -$1.06. The cargo market is reacting to the slight correction on paper yesterday with 180cst +$1.61, 380cst +$0.86 and MGO +$0.63.

The Singapore fuel oil price opened the week erasing the last gains, up $1.0 to $1.5 during the Platts window last Friday. The Singapore is expected to be weak fundamentally as heavy incoming next month. The cargo premium is mirroring this weakness at a discount of -4.5 to -3.0 ranges. The delivered premium was at app. $1.00 above cargo prices. This morning, fuel is trading up.

High premiums for prompt deliveries:

380cst: $449
180cst: $441
MGO: $659

Fujairah (delivered indications 28/9)

380cst: $445
180cst: $466
MGO: $722

Rotterdam

Yesterday (Only barge trade deals of >2 KT reported) 88KT was traded in the MOC between 430,50-432,00 with Litasco and Totsa as the main sellers to Cargill, BP and Koch as the main buyers.

The high sulfur fuel oil market structure in Northwest Europe was seen to be relatively stable Monday since last week, despite a weakening Singapore 180 CST market. “In the Singapore market at least you see a steady curve; in Rotterdam the market is just going sideways,” said one trader in NWE, referring to the relatively unchanged structure. Unattractive blending margins for RMG bunker specification fuel as a result of expensive cutter-stocks was lending some support to the market. The gap between good quality and high density, high viscosity product is widening fast with a shortage of prompt slurry avails. In the low sulfur fuel oil market, an ex-US cargo was imported into the ARA region by Shell which arrived in Rotterdam on Monday. Shell declined to comment. In October fewer ex-US barrels are expected entering the NWE market as a result of closed arbitrage economics from US to NWE, adding however that as South America was seeking to export LSFO out of local length, some barrels could end up in the NWE market and keep supply buffered. In the Mediterranean HSFO market, healthy volumes on offer continued to exert downward pressure on levels, sources said. FOB Mediterranean cargoes were assessed at a $6.75/mt discount to 3.5% FOB Rotterdam barges Monday, 25 cents/mt weaker since the close of last week. The MOC saw Galaxy continuing to offer RMG bunker specification HSFO.

380cst: $430
(1.0%): $453
180cst: $454
(1.0%): $476
DMB: N/A
MGO 0.1%S: $680