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Technical indicators: neutral to bullish

Oil markets are seen lifted by some optimism the Greek problem will be solved and the confidence vote will pass in the parliament. But gains will be limited ahead of US petroleum inventories, the more as the rather bearish technical weighs.

As was expected, oil futures traded lower Yesterday in electronic morning trading as the dollar rose, making dollar-nominated oil more expensive for traders outside the US. A strong ICE gasoil support at 926.50 dollars and the weaker dollar supported oil in the afternoon ahead of NYMEX session but the rise was short-lived. The bearish technical constellation and persistant worries over the euro zone's finances weighed on prices in late trading and helped futures to new intraday lows, with the exception of the WTI crude. The contract ended slightly higher, pausing as investors await more signals on whether the European Union can successfully manage Greece's debt crisis. The spread between the North Sea brent and the WTI has thus narrowed to around 18 dollars from a record of 22 dollars last week.

ICE Gasoil contract for July delivery settled at 932.50 dollars on Monday. This was 7.75 dollars below Friday's settlement. With some 51,900 contracts, the traded volume was about on average.

The short-term downtrends are still intact for all contracts. While the Stochastic indicator at the gasoil and brent chart remains bearish this morning, the one at the WTI chart is giving a bullish signal. The WTI July contract expiring today, market participants will rather focus on ICE contracts. The brent support at 111.00 dollars is regarded as strong today, only below this level more technical selling orders would be triggered. The first support for the WTI crude is seen at 91.15 dollars, the first resistance at 94.70 dollars. Brent's first resistance is seen at 112.50 dollars, its first support is at 111.00 dollars.

U.S.

Nymex Access gaining. Oil prices are gaining some ground in East Asia and Globex electronic trading this morning on easing concerns that Greece will default on its debt and expectations that US crude stockpiles may have dropped for a third week. The traded volume is slightly above average.

Survey of US petroleum inventories due out tonight at 22:30 (API) and Wednesday at 16:30 (DOE):

Crude oil -0.1; distillates +0.7; gasoline +0.8 million barrels vs previous week.

Houston (ex-wharf indications 20-6)

380 cst $635
180 cst $664
MDO $973

Very tight avails for 180 cst

New Orleans (ex wharf indications 20-6)

380 cst $638
180 cst $667
MDO $977

Singapore (correct as of 1430hrs LT - delivered indications)

Crude is bouncing up with WTI +$2.61. Singapore paper is bullish still with +$5.55 for 180 cst and +$6.25 for 380 cst for Jul, and for Aug 180 cst +$5.00 and 380cst +$5.95 with MGO Jul contracts at +$0.45 and for Aug at +$0.42. The cargo market is reacting to crude and paper with 180cst +$2.35, 380cst +$2.65 and MGO -$0.08.

The Singapore fuel oil market rose marginally estimated at +$2.5 during the Platts window yesterday. The latest Singapore heavy residual inventory saw a draw of -2.58 mbbl to 17.96 mbbl; below the 20 million bbl level. The incoming have been low but picking up to 2.9 to 3.0 million mt for July. The delivered premiums were at around $9.00 above cargo prices yesterday. Bunker fuel swaps lost app. $1.50-3.00/mt along the curve with losses slightly more pronounced at the back end of the forward curve. Both markets are trading higher this morning.

High premiums for prompt deliveries.

380 cst $652
180 cst $665
MDO $937

Fujairah (delivered indications 21-6)

380cst: $648
180cst: $675
MGO: $1030

Rotterdam

Indications for delivered bunkers:

380cst :$ 626
(1.0 %) :$ 678
180cst :$ 651
(1.0 %) :$ 704
MGO 0.1%S: $ 938