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Technical indicators: neutral

Oil markets are retreating from today's high, traders waiting for US economic later later this afternoon. The strong correlation between US-dollar and oil futures let prices fall in morning trading as the dollar strengthens vs the euro on profit taking. There is no news in the markets.

Oil prices rose on Friday as the dollar hit a six-month low versus the euro and global stocks edged higher after signs of economic improvement in the U.S. and China bolstered optimism that demand is growing in the world’s two largest energy-consuming countries.

ICE Gasoil October is expected to open 4.00 to 5.00 dollars up at about 724.25 dollars/ton after settling at 719.75 dollars (official settlement price) Friday night. This was 13.00 dollars above Thursday's settlement. Volume with some 35,700 deals below average.

Oil prices breached more resistance lines Friday on the ailing dollar and rising global stocks. A second, steep short-term uptrend has formed, see graphics below. Both RSI and Stochastic indicators do not give any clear signals, but are still in overbought territory, making a downward correction more and more likely. But the fundamental situation will also today be more observed than technical constellations. First WTI crude support line at 81.40 dollars today, first resistance line at 82.20 dollars.

U.S.

Nymex Access : Oil futures are flat in Asian trading hours and NYMEX electronic trading this morning, WTI crude trading near an eight-week high after Friday's rise. No news in the markets. The traded volume is on average.

Houston (ex-wharf indications 1-10)

380cst: $464
180cst: $484
MGO: $743

Very tight avails for 180cst

New Orleans (ex-wharf indications 1-10)

380cst: $466
180cst: $486
MGO: $747

Singapore (correct as of 1430hrs local time)

Crude is slowing with WTI +$0.33. Singapore paper is mirroring crude with 180cst +$5.20 and 380cst +$4.30 for Oct, and Nov 180 cst +$4.90 and 380cst +$5.00 with MGO Oct contracts +$0.36 and for Nov at +$0.41. The cargo market is continuing in it's bullishness with 180cst +$13.16, 380cst +$11.32 and MGO +$2.07.

In Singapore the close of the week saw the fuel oil prices go up more than $11.00 during Platts window tracking the crude spike previously. Market demand was softer on higher prices and the delivered premiums were ranging flat to $1.50 above cargo prices last Friday.

High premiums for prompt deliveries:

380cst: $467
180cst: $475
MGO: $703

Fujairah (delivered indications 4/10)

380cst: $472
180cst: $490
MGO: $735

Rotterdam

Yesterday (Only barge trade deals of >2 KT reported) 34KT was traded in the MOC between 449.50-452.00 with Totsa as the main seller to Gunvor as the main buyer.

Sources in the Northwest European high sulfur fuel oil market Thursday described the Rotterdam to Singapore arbitrage economics as breakeven to marginal for a December arrival. The steep 180cst contango in the Asian market would though help support adding that the move on the physical market would be due to a lack of alternative outlets for M-100 length in Europe rather than to lock in any profit. Blending in Rotterdam is not looking feasible so an outlet is preferable. Singapore is though over-supplied and end-user demand insufficient to absorb the length and so movers will be looking to store it. Shell’s 420,000 b/d Pernis refinery in Rotterdam is due to return from a period of scheduled maintenance by mid-October. Europe’s largest refinery began the maintenance September. With Pernis’ reemergence also comes an expectation that the NWE light cycle oil (LCO) market will see a pick up in supply. However, the cost of LCO was still high, being heard at 75% to 80% of front-month ICE gas oil futures, Thursday, keeping blending margins unattractive. The low sulfur fuel oil market remained well-supplied and, with a weak contango structure, market participants had little incentive to move the oil out of storage in ARA. The hi-lo differential remained weak at $12/mt Thursday, although $1/mt higher on the day.

380cst: $455
(1.0%): $469
180cst: $472
(1.0%): $491
DMB: N/A
MGO 0.1%S: $725