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Technical indicators: neutral to bullish immediate term / neutral to bearish medium term

Oil rebounded above $85 a barrel this morning after falling sharply from a more than two-year high last week as risk appetite improved and investors looked beyond Irish debt worries to better fuel demand fundamentals. European stocks fell right after the opening today as investors remained wary of making any bold moves while Ireland's position remains precarious and sovereign debt concerns continue to mount.

Oil prices tumbled during NYMEX session as concerns that a Chinese interest rate hike was imminent tempted investors to sell off. If China introduces interest rates that will slow demand, oil could trade a lot lower.

ICE gasoil December is is expected to open 4.00 to 5.50 dollars down at about 737.50 dollars/ton after settling at 742.25 dollars (official settlement price) Friday night. This was -16.00 dollars vs Thursday's settlement. Volume with some 78,600 deals above average.

Technical analysts regard the technical constellation as the main reason for Friday's collapse, when the RSI fell through the 70% line and WTI crude prices breached the 86.00 dollar support, triggering massive technical selling. RSI and Stochastic indicators left the overbought territory but are still giving slightly bearish signals. First WTI crude support seen at 84.50 dollars today, first resistance at 86.70 dollars. Technical analysts see a strong WTI crude support at 84.50 dollars today.

U.S.

Nymex Access : Oil prices tread water in Asian trading hours and NYMEX electronic trading this morning, WTI crude lingering below 85.00 dollars for a barrel as concerns that steps by the Chinese government to cool the economy may damp fuel prices prevail. No news in the markets. The traded volume is below average.

Houston (ex-wharf indications 12-11)

380cst: $491
180cst: $511
MGO: $782

Very tight avails for 180cst

New Orleans (ex-wharf indications 12-11)

380cst: $493
180cst: $513
MGO: $785

Singapore (correct as of 1430hrs local time)

Crude is slowing, but is still bearish with WTI -$0.54. Singapore paper is mirroring crude with 180cst -$3.30 and 380cst -$3.49 for Dec, and Jan 180 cst -$3.30 and 380cst -$3.25 with MGO Dec contracts -$0.39 and for Jan at -$0.39. The cargo market is finally reacting to the bearishness with 180cst -$11.03, 380cst -$11.96 and MGO -$1.77.

The Singapore fuel oil markets were also down by more than $11.0/mt during the Platts window last Friday tracking softening crude prices. The recent issues with having on-specs bunker grade products mainly due to high water content have been supportive of the delivered bunker premiums; it was more than $2.5 above cargo prices last Friday.

High premiums for prompt deliveries:

380cst: $490
180cst: $498
MGO: $743

Fujairah (delivered indications 15/11)

380cst: $497
180cst: $517
MGO: $740

Rotterdam

Friday (Only barge trade deals of >2 KT reported) 42KT was traded between 472.00-472.75 with Gunvor as the main seller to Chemoil and Litasco as the main buyers.

The NWE HSFO markets still see strong buying interest, with the Eastern Arbitrage bolstering. Despite four VLCC's have been fixed for early December loading, local avails remain adequate. The Capricorn Star and Al Jabriyah II were fixed for November loading. The HSFO Med market is not attracting any influx yet but the arbitrage out of NWE seems likely to open soon. The NWE LSFO markets continue to see imports out of the Americas, keeping them long.

380cst: $477
(1.0%): $493
180cst: $491
(1.0%): $514
DMB: N/A
MGO 0.1%S: $744