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Technical indicators: bearish

Oil prices ease on technically motivated profit taking. NYMEX crude hit important 84.00 dollar support and the brent fell as low as 86.00 dollars. Both supports prove strong for the time being. Traders fretted about Chinese moves to cool the country's overheating economy while the dollar is strengthening.

Yesterday oil prices eased further in late NYMEX session and after-hour trading, crude oil hitting 84.50 dollar support where the slide was eventually stopped. The stronger dollar and the bearish technical constellation were the major bearish factors.

OPEC: The UAE and the other OPEC members have made massive investments to ensure the world has sufficient spare oil capacity in case of a crisis. Mr Ali Obaid Al Yabhouni, the UAE’s Opec Governor said at the unveiling of the country’s plan to commemorate the oil exporting group’s 50th anniversary at a forum on December 5th that OPEC’s ability to respond to unforeseen events and whenever necessary to increase production depends on massive investments in spare capacity. Oilfields and oil facilities are kept unused in case of an emergency.

ICE gasoil December is is expected to open 1.50 to 3.00 dollars down at about 736.50 dollars/ton after settling at 738.75 dollars (official settlement price) Monday night. This was -3.50 dollars vs Friday's settlement. Volume with some 61,700 deals above average.

Oil prices have established at the lower limits of a new downtrend that has a strong support at 84.00 dollars for the WTI crude. Another important, medium-term support is seen at 83.00 dollars. Should this support be breached, massive technical selling will be triggered. Yet technical analysts do not forecast such a price collapse for today, as the Stochastic indicator has already entered oversold territory, while the RSI is still seen neutral. First WTI crude support seen at 84.00 dollars today, first resistance at 84.85 dollars.

U.S.

Nymex Access : Oil prices are easing in Asian trading hours and NYMEX electronic trading this morning, WTI crude lingering just above 84.00 dollars for a barrel on a stronger dollar/weaker euro. No news in the markets. The traded volume is above average.

Survey of US petroleum inventories API data will be released today at 22:30, DOE data Wednesday at 16:30. crude oil -0.3; distillates -2.1; gasoline -0.4 million barrels vs previous week.

Houston (ex-wharf indications 15-11)

380cst: $478
180cst: $498
MGO: $768

Very tight avails for 180cst

New Orleans (ex-wharf indications 15-11)

380cst: $481
180cst: $502
MGO: $773

Singapore (correct as of 1430hrs local time)

Crude is slowing still with WTI -$0.38. Singapore paper is reflecting it with 180cst -$5.50 and 380cst -$5.25 for Dec, and Jan 180 cst -$5.75 and 380cst -$5.74 with MGO Dec contracts -$1.19 and for Jan at -$1.19. The cargo market is mirroring crude and paper with 180cst -$2.47, 380cst -$3.16 and MGO -$0.50.

The Singapore fuel oil markets came off only more than $2.5/mt supported by stronger crude movement during the Platts window despite the huge drop in crude values from last Friday. The delivered bunker premiums ranged $1.5 to $2.5 above cargo prices yesterday.

High premiums for prompt deliveries:

380cst: $489
180cst: $501
MGO: $734

Fujairah (delivered indications 16/11)

380cst: $494
180cst: $515
MGO: $740

Rotterdam

Yesterday (Only barge trade deals of >2 KT reported) 64KT was traded between 469.00-472.50 with Petroned as the main seller to Litasco as the main buyer.

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: $473
(1.0%): $487
180cst: $495
(1.0%): $509
DMB: N/A
MGO 0.1%S: $738