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In the wake of weakening equities, oil futures have retreated during morning trade, whereas the Euro/Dollar-Parity has continued trading sideways. Yesterday, euphoria about a near solution for the Eurozone's debt crisis still pushed the markets, but today worries about Slowakia possibly refusing the EFSF's expansion weighed on investor's sentiment. ICE G.Oil and WTI Crude briefly fell below their first supports, creating further downward potential.

Yesterday, Oil prices consolidated in electronic morning trading Monday, rising around midday, still supported by the Franco-German pledge to shore up banks, settle the Greek crisis and help growth in Europe. Futures then rallied after the opening of NYMEX session, hitting first resistance lines as the euro rose sharply vs the dollar. After Wall Street opened considerably higher and European equity markets followed in its track, oil breached several important resistance lines in no time, among them the 21-day moving average. Technically driven buying orders supported the rally until late in the evening.

ICE Gasoil contract for October delivery settled at 918.00 dollars on Monday. This was 21.75 dollars above Friday's settlement. With some 43,200 contracts the traded volume was below average.

OPEC is likely to keep its oil production quotas unchanged at its next meeting in December, Iran's representative to the cartel said. "Oil producers and oil consumers are satisfied with current level of prices" according to Mohammad Ali Khatibi. "It is predicted most of the OPEC members to be in agreement with maintaining current level of oil production at the next meeting of the organisation in December," he said on Friday.

The Stochastic indicator is still bullish at all charts, as is the RSI this morning, but is in the overbought level. After yesterday's rally, oil prices are likely to consolidate today but with the possibility of a downside correction any time resulting from traders taking profit from yesterday's long positions. Still, futures have more upside which could carry WTI crude and the Brent as high as their longer-term resistance lines (88.45 dollars WTI, 111.60 dollars Brent). The technical analysis is rather difficult at the moment, as fundamental news and forex and stock markets have a greater influence on short-term pricing as usual. The WTI crude is supported at 85.00 dollars today, its first resistance is seen at 86.10 dollars. The Brent's first resistance is seen at 109.50 dollars, its first support is at 105.65 dollars.

U.S.

Nymex Access easing. Oil futures dropped slightly in East Asiaand Globex electronic trade this morning on profit taking, currently consolidating at their high level. The traded volume is below average.

Houston (ex-wharf indications 10-10)

380cst $632
180cst $678
MGO $933
Very tight avails for 180 cst

New Orleans (ex-wharf indications 10-10)

380cst $634
180cst $681
MGO $935

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

Crude is slowing with WTI +$0.85 Singapore paper is more bullish, gaining with +$6.45 for 180cst and +$6.00 for 380cst for Oct, and for Nov 180 cst +$7.10 and 380cst +$6.85 with MGO Oct contracts at +$0.51 and for Nov at +$0.49. The cargo market is in line with crude, slowing with 180cst +$1.58, 380cst +$2.79 and MGO +$0.06.

The Singapore fuel oil markets opened the week up more than $1.50 during the Platts window tracking crude movement. The Asian Fuel Oil crack eased yesterday while fundamentally, market is still firm. The delivered bunker premiums remain firm at around $23.00 above the cargo prices yesterday. This morning both markets are trading lower.

High premiums for prompt deliveries.

380 cst $646
180 cst $655
MDO $910

Fujairah (delivered indications 11-10)

380cst $655
180cst $660
MGO $1070

Avails issue are sustaining the market.

ARA (Amsterdam - Rotterdam - Antwerp)

The Northwest European bunker values across the main Northwest European bunker hubs continued to rise Monday as front-month Brent surged to $108.9/barrel, up $3/b from Friday’s settle. Demand in NWE remained weak as some buyers seemed to chose to stay away from the market as crude escalated. High sulfur fuel oil supplies for prompt inquiries in Rotterdamand Antwerpremained very tight as another VLCC was expected to load Tuesday.

Rotterdam

Indications for delivered bunkers:

380cst : $ 620
(1.0 %) :$ 641
180cst: $ 641
(1.0 %):$ 663
MGO 0.1%S: $ 912