Oil prices were dropping from a three-day high in New York as rising gasoline stockpiles in the U.S. and weaker economic growth in Europe signaled that demand is slowing. Futures slipped as much as 1.7 percent after European services and manufacturing output contracted for a third month in November as the worsening debt crisis pushed the region closer to a recession. The API figures show motor-fuel supplies climbed 5.42 million barrels last week. The U.S.economy expanded less than previously estimated in the third quarter, Commerce Department figures showed yesterday.
Oil prices rose in a choppy session yesterday, driven higher by fears of market instability because of Iransanctions. When equity markets reacted to news that third quarter U.S.economic growth was revised down more than expected, oil's gains were tempered but the markets managed to be resilient and bounced back throughout the afternoon. After the release of the APIdata, gasoline prices at the NYMEX shed earlier gains while heating oil and crude oil futures showed only little reaction to the data.
ICE Gasoil contract for December delivery settled at 952.00 dollars on Tuesday. This was 2.50 dollars above Monday's settlement. With some 80,900 contracts the traded volume was well above average.
Opec: Hussain al-Shahristani, Iraq's deputy prime minister for energy sees no need for OPEC to change its oil output at its meeting in December, although the cartel should consider closely monitoring the economic situation in Europe, so al-Shahristani. The problems in the euro zone haven't yet hit oil demand so OPEC should "roll over" its current production level at its meeting next month. The minister is confident that his country can hit its 12 million b/d oil output target until 2020.
Iran: The sanctions against Iran imposed by the USA, which several western countries, including France, the U.K. and Canada, joined in, are the major bullish factor for oil prices for the time being, directly targeting the country's financial and oil sector. The sanctions prohibit the sale of goods and services to Iran that aid its petroleum production, as well as impede the nation's banks ability to do business around the world. Iranis the third-largest supplier of crude to the world, exporting 2.2 million barrels per day, so markets are nervous about reaction to the measures from Iran and its supporters. In the past, Iran has repeatedly threatened to block the strait of Hormus, the main waterway for oil shipments from Arab countries. Should shipments be halted or Iranian production impaired by the sanctions, oil prices could rise sky high on the international markets, according to analysts. In view of Libya's production not being back to 100 percent yet, OPEC's oil reserves are not sufficient to compensate for a possible loss of Iranian oil.
While the Stochastic oscillator at the ICE charts gave a buying signal yesterday, the one for NYMEX crude oil is still neutral. The oversold market situation encouraged the upward correction within the current downtrend channels as key resistance lines proved strong. Only if these resistances are breached will more buying orders set a new bullish trend. Technical analysts expect trade to be calm today as market participants will be cautious before the release of the DOE data and with a long US weekend ahead. The WTI is supported at 95.95 dollars today, its first resistance is seen at 97.90 dollars. The Brent's first resistance is seen at 109.20 dollars, its first support is at 107.55 dollars.
U.S.
Nymex Access losing: Oil futures lost ground in Asian trading hours and on Globex electronic trading platform this morning as the dollar rose and a weak US GD Palong with the weakest factory activity in 32 months in China offset earlier support for oil prices from fresh sanctions against Iran. The traded volume is well above average. A string of European and US indicators being released today and the DOE data will be observed for direction.
API's: Crude oil -5.6; distillates -0.9; gasoline +5.4 million barrels vs previous week. Refinery utilization -0.5%
DOE's; due out tonight
Forecasts: Crude oil -0.3; distillates -1.6; gasoline +0.7 million barrels vs previous week.
Houston (ex-wharf indications 22-11)
380cst $633
180cst $683
MGO $988
Very tight avails for 180 cst
New Orleans (ex-wharf indications 22-11)
380cst $637
180cst $686
MGO $991
Singapore (correct as of 1430hrs LT - delivered indications)
Crude is easing again, turning with WTI -$0.87. Singapore paper is ignoring it and is gaining bullish momentum, gaining with +$10.95 for 180cst and +$10.25 for 380cst for Dec, and for Jan 180 cst +$9.50 and 380cst +$9.50 with MGO Dec contracts at +$0.92 and for Jan at +$0.91. The cargo market starting to turn with 180cst +$1.20, 380cst +$2.06 and MGO -$0.72.
The Singapore fuel oil markets inched up marginally more than $1.00 during the Platts window yesterday. The market had an unexpected buying interest narrowing the Asian fuel oil crack contrasting the previous day. The delivered bunker premiums were around $17.00 above the cargo prices yesterday. Bunker fuel swaps were assessed up app. $13.00- 11.00/mt along the curve with gains on the high side at the front of the forward curve. This morning markets are trading higher.
High premiums for prompt deliveries.
380 cst $658
180 cst $665
MGO $965
ARA (Amsterdam - Rotterdam - Antwerp)
The Northwest European bunker values in some bunker hubs rebounded Tuesday afternoon following stronger FOBRotterdambarges that tracked a more-than $1/barrel day-on-day rise in Brent crude. Oil prices were supported by a heightened risk premium after the UK, Canadaand the USannounced new sanctions on Iran’s oil sector. In anticipation of the rebound in crude, more demand could surface. Suppliers in Rotterdamand Antwerpcontinued to reported loading difficulties due to ongoing high sulfur fuel oil tightness. Loading delays of two to four days are reported.
Rotterdam
Indications for delivered bunkers:
380cst : $ 627
(1.0 %) :$ 656
180cst: $ 643
(1.0 %):$ 668
MGO 0.1%S: $960
