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Technical indicators: neutral to bearish

Oil futures edged lower in morning trading on a stronger US dollar. First supports have been breached at ICE and NYMEX. At present, oil prices are coming back from their intra-day lows on the retreating dollar. The release of the IEA's strategic oil reserves still seems to weigh on the complex.

Oil futures had already traded softer at ICE and NYMEX on Friday morning, picking up Thursday's tendency. The IEA's announcement to release 60 million barrels of strategic oil reserves in July and the climbing US dollar rendered possible some downward potential, whereas the first supports still proved strong. With oil prices having been rather volatile on Thursday, many market participants avoided voluminous orders, consolidating their positions. Only after some supports had been breached in the evening technical selling increased, triggering a significant drop of prices. Although oil futures slightly recovered again later, at the end of the day they settled considerably lower.

ICE Gasoil contract for July delivery settled at 874.50 dollars on Friday. This was 14.50 dollars below Thursday's settlement. With some 59,400 contracts, the traded volume was on average.

The Stochastic indicator is bearish this morning and gives market participants a selling signal. Analysts expect a continuously soft tendency within the steep downward trend channels, should Friday's lows be breached sustainably. The first support for the WTI crude is seen at 90.00 dollars, the first resistance at 92.35 dollars. The Brent's first resistance is seen at 105.80 dollars, its first support is at 103.00 dollars.

U.S.

Nymex Access losing. Oil prices slightly retreat during electronic morning trading. In the early morning, oil futures kept track of their way down and approach Friday's lows, weighed down by the rising dollar and the bearish fundamentals. The volume exchanged at NXMEX is on average. Investors are waiting for the opening of the European markets, as well as on new momentum by the foreign exchange market and US economic data to be published in the afternoon.

Houston (ex-wharf indications 24-6)

380 cst $614
180 cst $645
MDO $918

Very tight avails for 180 cst

New Orleans (ex wharf indications 24-6)

380 cst $617
180 cst $648
MDO $921

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

Crude is bearish still, losing with WTI -$1.03. Singapore paper is slowing in its losses with -$6.25 for 180 cst and -$6.55 for 380 cst for Jul, and for Aug 180 cst -$6.50 and 380cst -$6.75 with MGO Jul contracts at -$0.85 and for Aug at -$0.92. The cargo market is now starting to react to the bearishness as well, losing with 180cst -$18.59, 380cst -$17.77 and MGO -$4.99.

The Singapore market followed plunging crude prices. A relatively strong bunker demand was reported from Singapore and this put a limit a loss compared to crude. Bunker fuel prices were assessed down in the front of the curve but gained a little forward flattening the curve significantly. Despite a drop of crude prices 2012 bunker papers look quite strong. This morning, both Rotterdam and Singapore fuel papers are trading down.

High premiums for prompt deliveries.

380 cst $635
180 cst $645
MDO $890

Fujairah (delivered indications 27-6)

380cst: $622
180cst: $671
MGO: $1025

Rotterdam

Indications for delivered bunkers:

380cst :$ 598
(1.0 %) :$ 645
180cst :$ 624
(1.0 %) :$ 674
MGO 0.1%S: $ 875