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Technical indicators: neutral to bearish

Despite having breached first supports, oil futures traded sideways in a rather tight range during morning trade. Investors look ahead to new impetus after the opening of US markets in the afternoon.

Oil prices rose in the morning, supported by news from the USA that the House had approved legislation to raise the debt limit, a day before a possible default. Resistance lines were breached and buying orders triggered. A worse-than-expected ISM manufacturing index, showing that the world's biggest energy consumer had more problems than its debts, weighed on oil during the session in New York and screwed down prices below support lines. Expectations of another build in US crude and distillates stocks also applied some pressure on the complex that only recovered slightly in late session and after-hour trading.

OPEC's latest statistics show that its members have significantly raised output in July, despite their consent to stick to the current quota ceiling. Total OPEC production reached a 3-year high of 30.4 million barrels a day (+600.000 bpd vs June), 350.000 barrels of which come from Saudi Arabia that is producing 9.8 mbpd, last done in the early 80's. Since March the cartel has raised output by around 1.8 mbpd, completely compensating the 1.5 mbpd lost through the Libyan war.

ICE gasoil for August delivery settled at 970.75 dollars on Monday. This was 0.25 dollars below Friday's settlement. With some 64,300 contracts the traded volume was above average

The stochastic indicator is already slightly bullish at the ICE, giving some buying impetus to the markets. As for the WTI Crude, it is not yet giving a clear signal yet, but is definitely in the oversold area. Should the indicator also give a selling signal to markets in the course of the day, according to chart analysts, there are likely to be some tests of medium term resistances. Analysts therefore assess the situation as slightly bullish, expecting a steady tendency in the course of the day. The first support for the WTI crude is seen at 96.60 dollars, its first resistance at 97.40 dollars. The Brent's first resistance is seen at 118.80 dollars, its first support is at 117.00 dollars.

U.S.

Nymex Access gaining: Oil futures pared Monday's gains in Asian trading and Globex electronic exchange to trade little changed as signs the U.S. economy is slowing countered speculation that the country will be able to solve its debt crisis. With more US indicators and US stockpiles ahead, traders are being cautious. The traded volume is about on average.

Houston (ex-wharf indications 1-8)

380 cst $658
180 cst $692
MDO $1004

New Orleans (ex wharf indications 1-8)

380 cst $661
180 cst $695
MDO $1007

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

Crude is dropping like a stone with WTI -$2.79. Singapore paper is turning bearish again as well with -$5.55 for 180cst and -$5.35 for 380cst for Aug, and for Sep 180 cst -$7.50 and -$8.00 for 180cst with MGO Aug contracts at -$3.95 and for Sep at -$3.95. The cargo market is only reacting to Yesterday's bullishness with 180cst +$11.00, 380cst +$8.54 and MGO +$3.57.

The Singapore fuel oil markets rose more than $8.00 during the Platts window tracking crude strength at the start of the week. The delivered premiums were down to around $5.50 above cargo prices yesterday as the higher prices dampened demand. This morning both markets are trading higher. High premiums for prompt deliveries.

380 cst $679
180 cst $687
MDO $969

Fujairah (delivered indications 2-8)

380 cst $701
180 cst $731
MDO $1092

Rotterdam

Indications for delivered bunkers:

380cst : $ 664
(1.0 %) :$ 697
180cst: $ 692
(1.0 %):$ 724
MGO 0.1%S: $ 978