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Technical indicators: neutral

Yesterday, oil futures were trading on high levels for most of the day. A weak US dollar was supportive for oil prices in early trading hours. During afternoon market participants sold some positions to adjust their risk positions ahead of the DOE inventories. After 17:30 oil prices rose in a first reaction on bullish inventories. Traders used the opportunity to lock in profits and sold oil futures. Oil prices will be rather steady ahead of the weekend. The indicator RSI gives neutral signals, while the Stochastic is still in bullish territory. First WTI crude support line seen at 82.20 dollars today, first resistance line at 84.15 dollars. Oil prices are seen rather bullish for today within the existing trendchannel, but with little volatility as market participants are cautious ahead of the weekend. Traders are waiting for release of more economic data.

OPEC trimmed its demand forecast for its members’ crude for this year as production from outside the group grew the most since 2002. OPEC, responsible for about 40 percent of global supplies, predicted in a monthly report today that the world will need 28.6 million barrels of oil a day from its 12 members this year. That’s about 100,000 barrels a day less than last month’s revised figure. OPEC ministers have agreed to keep the group's output target unchanged, OPEC President Wilson Pastor confirmed on Thursday. OPEC had been widely expected to stick with a policy in place since December 2008 when it announced a record supply cut of 4.2 million barrels per day. The group is gathering in Vienna on Oct 14 for their next meeting.

ICE Gasoil October is expected to open -5,00 to -6,50 dollars higher at about 718,00 dollars/ton after settling at 723,75 dollars (official settlement price) Thursday night. This was -1,75 dollas below Wednesday's settlement. Volume with some 64.200 deals on average.

US economy: Initial unemployment claims rose by 13,000 to 462,000 in the week ended Oct. 9. New claims for the previous week, ended Oct. 2, were revised upward to 449,000 from 445,000. Economists had predicted new claims would rise by only 1,000. The index of producer prices, which measures how much manufacturers and wholesalers pay for goods and materials, rose a seasonally adjusted 0.4% for finished goods in September from August. That followed a 0.4% rise in August and a 0.2% increase in July. The total U.S. deficit in international trade of goods and services rose by 8.8% to 46.35 billion dollars from a downwardly revised 42.58 billion dollars the month before, Commerce said. The July trade gap was originally reported as 42.78 billion dollars. Economists had predicted a 43.4 billion dollars trade gap.

U.S.

Nymex Access : Oil futures with little volatility on a lower level in NYMEX electronic trading this morning. No news in the markets. The traded volume is on average. Traders waiting for US economic data.

APIs: crude oil -4.007; distillates -0.254; gasoline -1.883 million barrels vs previous week. Refinery utilization -1.5 % = 80.1%

DOEs: crude oil -0.416; distillates -0.255; gasoline -1.769 million barrels vs previous week. Refinery utilization -1.2 % = 81.9 %

Survey : crude oil +1.2; distillates -1.3; gasoline -1.2 million barrels vs previous week. Refinery utilization: +0.1%

Houston (ex-wharf indications 14-10)

380cst: $472
180cst: $488
MGO: $742
Very tight avails for 180cst

New Orleans (ex-wharf indications 14-10)

380cst: $474
180cst: $490
MGO: $746

Singapore (correct as of 1430hrs local time)

Crude is now losing with WTI -$0.82. Singapore paper is following with 180cst -$4.05 and 380cst -$4.55 for Oct, and Nov 180 cst -$0.15 and 380cst -$4.60 with MGO Oct contracts -$0.65 and for Nov at -$0.75. The cargo market is starting to react with 180cst -0.14, 380cst -$0.13 and MGO +$1.04.

Despite the move in crude prices Singapore fuel oil market stayed relatively quiet yesterday. The Asian fuel oil cracks continued to take a beating, weakening further. The Singapore heavy residual inventory reported a draw -0.65 mbbl to 21.25 mbbl. The delivered bunker premiums maintained app. $1.0 above cargo prices yesterday.

High premiums for prompt deliveries:

380cst: $468
180cst: $476
MGO: $711

Fujairah (delivered indications 14/10)

380cst: $468
180cst: $485
MGO: $735

Rotterdam

Yesterday (Only barge trade deals of >2 KT reported) 44KT was traded in the MOC between 454,75-457.00 with Gunvor as the main seller to mixed buyers.

Northwest European FOB high sulphur fuel oil barge values regained a premium over Mediterranean FOB cargoes Thursday, marking the end of a four-day run in which the Med had topped NWE. In addition, interest in Rotterdam barges, stemming from the possible arbitrage opening to Singapore, flipped the HSFO structure into backwardation. Platts assessed FOB Med cargoes at $453.00/mt and FOB NWE barges at $455.00/mt. The October-December Singapore CST 180 swap spread that had started the week at $6.95/mt, gradually widened to Thursday’s $8.75/mt. NWE had been growing longer as local demand was insufficient enough to absorb the product flowing from the Baltic. At the same time, the tightness in the Med was eased with anticipated exports from Rotterdam to the Med of at least 100 kt by those who were able to move oil. The continued strike at the French oil terminal of Lavera, now in its eighteenth day, was having only a marginal impact on the region’s HSFO or LSFO supplies, sources said. The hi-lo differential was assessed at $5.75/mt, $1.5/mt wider on the day reacting to a weak HSFO market and as LSFO traders elected to hold product in tank rather than offer it on the prompt market, despite healthy availability, sources said. The barge-cargo differential in the LSFO market, however, remained wide and was assessed at $12/mt, as sources said standard LSFO bunker demand kept levels for finished RMG oil supported. In the Med, the CIF Med LSFO cargoes were seen at a $14.25/mt premium to comparable FOB NWE cargoes, narrower than the freight differential for the route by $15.25/mt.

380cst: $461
(1.0%): $483
180cst: $476
(1.0%): $499
DMB: N/A
MGO 0.1%S: $726