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Technical indicators: bearish immediate term / bullish medium term

Oil prices edged lower during early European trade. Weaker equities cause selling momentum regarding the oil complex. Technical supports (yesterday's lows) prove strong up to now. Profit taking is expected only after these support lines are breached.

Yesterday, oil futures traded in a tight range sideways at ICE and NYMEX in the morning. In the early afternoon they have been lifted by better-than-expected US initial jobless claims and unexpectedly increased retail sales. After first resistances proved strong, however, and Ben Bernankes comments in the late afternoon had burst hopes on early economic aids provided by the US Fed, oil futures have returned from their intra-day highs. The thereupon advancing dollar has rendered possible further downward potential, making oil prices breach first supports. This drop in prices, particularly showing again for WTI Crude, has been accelerated by technical selling orders. Compared to ICE-futures, the US crude oil lost far more ground ending its downward correction only near short-term supports.

ICE Gasoil contract for August settled at 972.50 dollars on Thursday. This was 10.50 dollars below Wednesday's settlement. With some 70,800 contracts, the traded volume was above average.

While the stochastic indicator does not give any clear signal regarding the WTI Crude this morning, the indicator is slightly bearish for the ICE. The RSI for Brent already scratches at the 70%-line and might develop a selling impulse, should it breach this area further down. Chart analysts thus assess the situation as slightly bearish and expect small losses during the first half of the day. The extent of profit taking will depend on whether oil futures are able to breach yesterday's lows or consolidate. The first support for the WTI crude is seen at 94.70 dollars, its first resistance at 98.55 dollars. The Brent's first resistance is seen at 117.80 dollars, its first support is at 115.75 dollars.

U.S.

Nymex Acces losing. Oil futures trade lower during electronic morning trade. After new support areas were defined by yesterday's intra-day lows, market participants seize the downward potential and liquidate some long positions. The volume traded at NYMEX is below average this morning. Investors wait for the opening of the European markets, for further impetus from foreign exchange and for US economic data due in the afternoon.

Houston (ex-wharf indications 14-7)

380 cst $647
180 cst $678
MDO $998

Very tight avails for 180 cst

New Orleans (ex wharf indications 13-7)

380 cst $653
180 cst $684
MDO $1001

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

Crude is dropping again with WTI -$2.26. Singapore paper is reflecting the latest turn with -$6.95 for 180 cst and -$5.70 for 380 cst for Jul, and for Aug 180 cst -$6.55 and 380cst -$6.60 with MGO Jul contracts at -$1.91 and for Aug at -$2.09. The cargo market is slowing with 180cst +$2.83, 380cst +$0.90 and MGO +$0.15.

The Singapore fuel oil markets rose only +$1.0 - 3.0/mt during the Platts window yesterday. The cargo premium weakened on stronger selling. The delivered premiums slipped to around $6.0 - 7.0/mt above cargo prices yesterday. Bunker swaps moved sharply down yesterday together with crude futures. The front of the curve was a little stronger that the backend adding a dollar and a half to backwardation. This morning markets are trading higher.

High premiums for prompt deliveries.

380 cst $664
180 cst $672
MDO $960

Fujairah (delivered indications 15-7)

380cst: $670
180cst: $701
MGO: $1060

Rotterdam

Indications for delivered bunkers:

380cst :$ 648
(1.0 %) :$ 708
180cst :$ 673
(1.0 %) :$ 726
MGO 0.1%S: $ 973