Oil prices rose in morning trade on easing concerns over the euro-zone economic crisis, market participants taking their cues mainly from stocks and foreign exchange markets, but soon slipped back, unable to capitalize on its gains. When Wall Street opened in the green, oil futures followed in the track, hitting first resistance lines but could not break through. A stronger dollar later in the session retrieved prices from intraday highs. When the WTI crude fell through its first support lines, more technical selling orders were triggered and oil prices settled lower, giving up most of the gains they had made during the week. The strong dollar supported the oil complex also in early Asian trading this morning. The Stochastic indicator at the brent and the gasoil chart is still somewhat bullish this morning, but the one at the WTI chart gives clearly bearish signals. The WTI crude is hovering just above its medium-term support line at 86,60 dollars. Should the contract fall through this line, technical selling orders will be triggered, giving the whole oil complex some strong bearish signals. In this case, so technical analysts reckon, WTI could fall as low as 85,00 dollars and even 83,00 dollars. The first support for the WTI crude is seen at 86,60 dollars, its first resistance at 89,50 dollars. The Brent's first resistance is seen at 114,00 dollars, its first support is at 110,90 dollars.
ICE Gasoil contract for October delivery settled at 950,50 dollars on Friday. This was 1,75 dollars below Thursday's settlement. With some 72.800 contracts the traded volume was above average.
Global oil markets are currently well supplied, so most analysts, while Europe still lacks low-sulfur crude due to supply problems with North Sea and Libyan oil. The brent-WTI spread remains thus above 24 dollars for a barrel. OPEC members that are producing above the official quota have not yet decided whether to cut output now that Libyan oil will start to flow. The next scheduled meeting of the cartel will be in December. Libya's state-owned oil company Agoco currently produces around 150.000 barrels of crude oil per day and is planning to raise oil output to 200.000 bpd by next month, so a company spokesman. Yet the bad state of the oil drilling facilities will slow down production. Still, Agoco plans to resume oil exports within ten days. OPEC's no. 1 oil producer revised down its oil demand forecast for the 4th quarter 2011 and for the year 2012 due to the deteriorating global economy. Even though demand is still seen growing this year and the coming year, it will be lower than expected earlier. The kingdom, which produced 9.76 million barrels per day in August, up from 9.61 million barrels per day in July, has not decided yet whether to adjust its current output level after Libya resumes oil exports.
The 17-nation currency slid against most of its 16 major peers, with its weakness gathering pace as investors reacted badly to an unproductive European Union meeting in Poland. The failure of the European finance ministers to come up with anything concrete was a disappointment for the markets and consequently the euro dropped as investors were seeking safer assets. A cancellation of a visit by Greek Prime Minister George Papandreou to the United States to chair an emergency meeting and a regional election defeat for Germany's chancellor Angela Merkel added fuel to an already tense euro. With a two-day U.S. Federal Reserve policy meeting looming ahead on Tuesday and Wednesday, the euro may manage to hold above last week's seven-month low in the near-term. The euro is currently selling at 1,4309 dollars compared to 1,3797 dollar Friday night in New York. Should it fall below its 1,36 dollar support, the Stochastic indicator would probabely give more bearish signals. The single currency has support at 1,3650 dollars, 1,36 dollars and 1,3555 dollars. Resistances are at 1,3710 dollars, 1,3840 dollars and 1,3885 dollars.
U.S.
Nymex Access losing: Oil futures fell in East Asia and Globex electronic trade this morning along with the euro on concerns that the euro zone debt crisis will erode oil demand and as investors were seeking safer assets. The traded volume is slightly above average. Due to a lack of economic indicators, traders will eye foreign exchange rates today.
Houston (ex-wharf indications 16-9)
380cst $642
180cst $686
MGO $960
Very tight avails for 180 cst
New Orleans (ex-wharf indications 16-9)
380cst $645
180cst $689
MGO $965
Singapore (correct as of 1430hrs LT - delivered indications)
Crude is losing sharply on profit taking and more economic uncertainty with WTI now -$2.44. Singapore paper is is morroring but not wholeheartedly with -$10.45 for 180cst and -$10.65 for 380cst for Sept, and for Oct 180 cst -$10.45 and 380cst -$10.80 with MGO Sept contracts at -$1.51 and for Oct at -$1.49. The cargo market is reflecting the rises on Friday with 180cst +$20.30, 380cst +$19.18 and MGO +$3.39.
The Singapore fuel oil markets gained more than $19.0 during the Platts window last Friday tracking crude and supported by strong buying interest. The Singapore heavy residual inventory reported a built of +0.27 mbbl to 21.28 mbbl. The delivered bunker premiums slipped to around $7.25 above cargo prices last Friday.
High premiums for prompt deliveries.
380 cst $652
180 cst $663
MDO $930
Fujairah (delivered indications 19-9)
380cst $662
180cst $675
MGO $1060
Rotterdam
Indications for delivered bunkers:
380cst : $ 644
(1.0 %) :$ 662
180cst: $ 665
(1.0 %):$ 683
MGO 0.1%S: $ 955
