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

The strong dollar again causing losses throughout the complex, according to market participants. Oil futures dropped near yesterday's lows. Additional bearish momentum is given by weak stocks.

As was expected, oil futures traded marginally lower at the beginning of this week. Technical selling signals at ICE and NYMEX led to profit taking supported by foreign exchange. As the European debt-crises persists and appears also to affect Italy, the Euro was under pressure yesterday. The dollar, which is considered to be a „safe-haven“ currency benefits from these insecurities, making oil futures more expensive for investors outside the USA and rendering possible some profit taking in the course of the day. In the morning oil prices also fell on Chinese data. The complex's soft tendency only ended in the evening, when speculators took advantage of the lower prices to join in again. Thus, oil futures jumped once more shortly before 6 p.m., creating no further upward potential, however. As the bearish technical momentum and the strong dollar outweighed other factors, oil futures settled slightly lower on Monday.

ICE Gasoil contract for July settled at 958.75 dollars on Monday. This was 4.00 dollars below Friday's settlement. With some 68,100 contracts, the traded volume was above average.

The stochastic indicator for NYMEX and ICE is still clearly bearish this morning. While the RSI for WTI crude already gives a selling signal to the markets, the indicator is still above the 70%-line for Brent and Gasoil. Only if this line is transgressed there will be additional selling signals. Thus chart analysts expect a short-term bearish development with some tests of supports. The first support for the WTI crude is seen at 94.15 dollars, its first resistance at 97.75 dollars. The Brent's first resistance is seen at 117.25 dollars, its first support is at 116.85 dollars.

U.S.

Nymex Acces losing. Oil futures slightly retreated during electronic trading. Profit taking and the strong dollar weigh on oil futures this morning. The volume traded at NYMEX is slightly below average this morning. Investors wait for the opening of the European markets, for further impetus from foreign exchange and for US oil inventories data.

Houston (ex-wharf indications 11-7)

380 cst $649
180 cst $680
MDO $984

Very tight avails for 180 cst

New Orleans (ex wharf indications 11-7)
380 cst $652
180 cst $683
MDO $987

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

Crude is cooling somewhat, losing still with WTI -$0.91. Singapore paper is mirroring it with -$5.90 for 180 cst and -$5.90 for 380 cst for Jul, and for Aug 180 cst -$5.45 and 380cst -$5.45 with MGO Jul contracts at -$1.15 and for Aug at -$1.09. The cargo market is finally starting to reflect the bearishness with 180cst -$8.65, 380cst -$12.85 and MGO -$0.89.

The Singapore fuel oil markets softened and lost more than $7.00 during the Platts window yesterday tracking the softening crude prices. Despite the softer prices, market demands have been pretty slow since many expect prices to soften further. The delivered premiums remained around $9.00 above cargo prices yesterday. Bunker fuel swaps lost a few dollars along the curve with losses more pronounced at the front of the forward curve where Rotterdam papers lost app. $3.50/mt while losses in Singapore were more than $5.00/mt. This morning both markets are trading down.

High premiums for prompt deliveries.

380 cst $659
180 cst $668
MDO $957

Fujairah (delivered indications 12-7)

380cst: $662
180cst: $696
MGO: $1062

Rotterdam

Indications for delivered bunkers:

380cst :$ 635
(1.0 %) :$ 689
180cst :$ 656
(1.0 %) :$ 712
MGO 0.1%S: $ 962