Market participants consolidated risky positions yesterday, covering their short positions after Monday's price collapse. A weaker dollar and the strong opening of Wall Street supported the oil complex during the session in New York. Despite a disappointing ZEW indicator, the euro regained some ground on expectations that the U.S. Federal Reserve will announce new monetary easing measures to jumpstart the economy at the end of a two-day meeting. But despite Tuesday's positive European close and early gains on Wall Street, oil markets failed to hold on to their gains following a lack of concrete progress at a conference call between Greece and the troika and shed most of their earlier gains later in the session. Both the Stochastic and RSI indicators are bearish at all charts this morning. Yet technical analysts opt for a consolidation within yesterday's margin today, as market participants eye important fundamentals (result of the Federal Open Market Committee meeting, DOE data) today. Only after the release of the data will technical signals be observed again. The first support for the WTI crude is seen at 85,25 dollars, its first resistance at 87,50 dollars. The Brent's first resistance is seen at 111,10 dollars, its first support is at 108,85 dollars.
Market participants eye the release of DOE data and the announcement of the FED today, so that trade will be rather thin with little volatility until then. Should the FED decide on new quantitave easing measures to stimulate the ailing US economy the US dollar would drop and oil prices would rise on increasing demand of investors outside the U.S. Should the FED not decide on any measures, however, market players are seen selling off and support lines could be breached.
ICE Gasoil contract for October delivery settled at 939,00 dollars on Tuesday. This was 7,50 dollars above Monday's settlement. With some 51.200 contracts the traded volume was about on average.
Violent protests rocked large oil fields in Colombia operated by Canada-based "Pacific Rubiales", forcing the company to halt production and declare a 'force majeure' on oil deliveries. Several hundred Rubiales employees demanding better working conditions blocked roads and destroyed company property. A total of some 225,000 barrels of crude a day has been shut in, so a company official.
After the WTI crude October contract expired, the brent-WTI spread is still above 24,00 dollars for a barrel. But the expected improvement in the delivery of Forties crude by October, rising Nigerian oil exports and the restart of oil production in Libya is expected to reduce the spread considerable in the weeks and months to come.
The euro rose against the greenback on Tuesday as markets focussed on the possibility of further stimulus from the Fed and aided by Greece's pledge to bring forward painful austerity measures. The Fed is expected today to announce a fresh effort to invigorate the faltering U.S. recovery by pushing long-term borrowing costs lower through rebalancing of its $2.8 trillion portfolio of bond holdings towards longer-term securities. The euro is currently selling at 1,3691 dollars vs 1,3702 dollars Tuesday night in New York. The single currency has support at 1,3660 dollars, 1,3595 dollars and 1,3555 dollars. Resistances are at 1,3745 dollars, 1,38 dollars and 1,3885 dollars.
U.S.
Nymex Access gaining: Oil futures are steady in East Asia and Globex electronic trade this morning with a tendency to rise on speculation the FED will take steps to bolster the U.S. economy. The traded volume is below average. Market participants eye the release of US petroleum inventories and the end of the FED meeting.
US crude stocks rose more than expected last week although refinery utilization also rose. This is why the data are considered bearish for the oil market. According to MasterCard SpendingPulse US gasoline use rose 4.5% last week. For most analysts this is not necessarily a sign of an actual increase in demand but of the delivery of quantities that were shut in by tropical storms the beginning of the month and are now being thrown on the market.
Houston (ex-wharf indications 20-9)
380cst $638
180cst $682
MGO $960
Very tight avails for 180 cst
New Orleans (ex-wharf indications 20-9)
380cst $641
180cst $685
MGO $965
Singapore (correct as of 1430hrs LT - delivered indications)
Crude is losing steam after climbs yesterday with WTI now -$0.12. Singapore paper is still bullish with +$5.60 for 180cst and +$5.35 for 380cst for Oct, and for Nov 180 cst +$5.05 and 380cst +$5.30 with MGO Oct contracts at -$0.11 and for Nov at -$0.12. The cargo market is losing with 180cst -$7.47, 380cst -$6.32 and MGO -$1.99.
The Singapore fuel oil markets extended its loss by more than $6.25 during the Platts window yesterday. Market remains firm with strong bids in the physical market. The delivered bunker premiums remained around $9.50 above cargo prices yesterday. Bunker fuel swaps gained app. $8.50/mt along the curve both for Singapore and Rotterdam papers.
High premiums for prompt deliveries.
380 cst $650
180 cst $655
MDO $930
Fujairah (delivered indications 21-9)
380cst $657
180cst $670
MGO $1050
ARA (Amsterdam - Rotterdam - Antwerp)
Prices in the ARA firmed on higher oil prices, stronger demand and tight high Price levels in Rotterdam and Antwerp sulfur fuel oil availability. The Rotterdam 380 CST HSFO market continued to strengthen amid expectations that the upcoming loading of four VLCCs would tighten availability and prompt higher HSFO bunker premiums. The last time the hub saw a string of VLCCs simultaneously loading, bunker premiums surged to as high as about $15/mt. In the MOC 1% 652-654 were the levels traded, with hs 636.25-641 levels traded.
Rotterdam
Indications for delivered bunkers:
380cst : $ 643
(1.0 %) :$ 658
180cst: $ 664
(1.0 %):$ 679
MGO 0.1%S: $ 939
