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Technical indicators: neutral to bearish

Oil prices ease in morning trading as dollar rises on expectations of a positive US unemployment report.

Oil prices collapsed during the session in New York as the dollar unexpectedly rallied after better-than-expected US initial jobless claims restored confidence in the strength of the economic recovery in the USA.

The OPEC meets in Vienna next week for the first time in seven months. Robust oil prices might induce OPEC to pump more crude, helping to calm a rising market and limit damage to a fragile economy, but the cartel is unlikely to agree a formal change in output

ICE Gasoil October is expected to open 6.25 to 7.75 dollars lower at about 713.00 dollars/ton after settling at 721.00 dollars (official settlement price) Thursday night. This was 12.50 dollars below Wednesday's settlement. Volume with some 43,200 deals on average.

Oil prices rose within the existing uptrend Thursday, but when ICE gasoil and the brent failed to breach first resistance lines the oil complex collapsed after technical selling orders were triggered, initiated by the dollar rallye. The Stochastic indicator gave bearish signals Thursday, but both RSI and Stochastic indicator are still in overbought territory. First WTI crude support line at 81.00 dollars today, first resistance line at 84.45 dollars.

U.S.

Nymex Access : Oil futures edged higher in Asian trading hours and NYMEX electronic trading this morning in a technical reaction to Thursday's hefty losses and supported by the weaker dollar. No news in the markets. The traded volume is above average. Traders eye the release of the US employment report later today.

Houston (ex-wharf indications 7-10)

380cst: $473
180cst: $493
MGO: $743

Very tight avails for 180cst

New Orleans (ex-wharf indications 7-10)

380cst: $475
180cst: $496
MGO: $747

Singapore (correct as of 1430hrs local time)

Crude is dropping like a stone, recorrecting after the surge with WTI -$2.55. Singapore paper is following crude with 180cst -$13.95 and 380cst -$14.75 for Oct, and Nov 180 cst -$13.85 and 380cst -$14.80 with MGO Oct contracts -$2.17 and for Nov at -$2.61. The cargo market is not yet reacting, but slowing non the less with 180cst +$4.54, 380cst +$5.25 and MGO +$0.69.

The Singapore heavy residual inventory reported a draw -0.269 mbbl to 21.9 mbbl as incoming cargoes are delayed from the West. Bunker demand is pretty soft with delivered premiums at more than $1.0 above cargo prices yesterday. The Singapore fuel oil market was up more than $4.5 yesterday tracking crude movement.

High premiums for prompt deliveries:

380cst: $466
180cst: $475
MGO: $694

Fujairah (delivered indications 7/10)

380cst: $480
180cst: $491
MGO: $728

Rotterdam

Yesterday (Only barge trade deals of >2 KT reported) 42KT was traded in the MOC between 459.00-462.00 with Koch as the main seller to Totsa and Gunvor as the main buyers.

Bullish crude movements despite the build in US stocks added to the relatively weak avails is keeping the HSFO markets firm. The East bound arbitrage seems to become at workable levels again, also underpinning the local markets. Two VLCC's are reported to be fixed for October loading one for Vitol's accounts, the other for RWE. Consequently healthy buying interest is being shown especially for bunker spec. THe market structure remains still though with Oct / Nov contango spread assessed at minus $1.75/mt, $0.25 weaker. The Fos Lavera strike situation is tightening things in the Med with the North-Med differential swap narrowing $3 on the day with demand strengthening in especially Gibraltar and Malta. Product length in the LSFO markets with the inbound US cargoes is weighing things down thereby exacerbating the cargo / barge differential.

380cst: $460
(1.0%): $480
180cst: $481
(1.0%): $503
DMB: N/A
MGO 0.1%S: $720