As yesterday's inventories data emerged mixed, they have no decisive influence on oil prices. Investors currently focus on the global economic situation, whose outlook became rather dire given the series of disappointing economic data published yesterday. As risk aversion has risen again, market players take some profit regarding riskier assets and invest in so-called safe haven assets as the US dollar. Thus dollar traded oil futures are more expensive, encouraging profit taking at ICE and NYMEX.
Oil futures sank yesterday, as traders focused on a wave of dismal economic headlines that raise concerns about oil demand. Futures spent most of the session firmly in negative territory after claims for jobless benefits in the US rose last week and a key gauge of Chinese manufacturing activity posted its biggest monthly decline for November since 2009. Those headlines, along with a disappointing German bond auction, spurred concerns about weakening economic growth, weighing on the euro and equity markets which are closely linked with oil prices. A steep draw in US crude oil inventories as released by the DOE could only lend temporary support. The increase in gasoline stocks, the overall bearish sentiment and a rising dollar dominated the markets. Support lines were breached throughout the day and oil prices at ICE and NYMEX settled lower.
ICE Gasoil contract for December delivery settled at 946.00 dollars on Wednesday. This was 6.00 dollars below Tuesday's settlement. With some 53,900 contracts the traded volume was about on 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.
The Stochastic oscillator at the brent chart is modestly bullish, while the one for NYMEX crude oil and the G.Oil at the ICE is still neutral. The oversold market situation accounts for more upside to prices, but as key resistance lines proved strong yesterday, technical analysts forecast only minor upward corrections. Oil prices are rather seen in consolidation today as market participants will be cautious with the long USweekend ahead. The WTI is supported at 95.40 dollars today, its first resistance is seen at 97.05 dollars. The Brent's first resistance is seen at 108.15 dollars, its first support is at 107.00 dollars.
U.S.
Nymex Access losing: Oil futures trade higher in Asiaand on Globex electronic trading platform this morning as market participants cover short positions after support lines proved strong and the dollar eases against the euro. The traded volume is significantly below average and trade is expected to stay thin today.
API's: Crude oil -5.6; distillates -0.9; gasoline +5.4 million barrels vs previous week. Refinery utilization -0.5%
DOE's; Crude oil -6.2; distillates -0.8; gasoline +4.5 million barrels vs previous week. Refinery utilization +0.7%
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 losing still, but easing with WTI -$0.38. Singapore paper is starting to react to this, losing with -$1.95 for 180cst and -$3.00 for 380cst for Dec, and for Jan 180 cst -$1.95 and 380cst -$3.00 with MGO Dec contracts at -$1.24 and for Jan at -$1.29. The cargo market is fully reacting to the bullish start of the week with 180cst +$11.30, 380cst +$10.30 and MGO +$0.50.
The Singapore fuel oil markets surged up more than $10.00 during the Platts window yesterday. The market extended its strong buying interest supporting and pushing the Asian fuel oil cracks tremendously. The delivered bunker premiums were around $16.00 above the cargo prices yesterday. This morning markets are trading higher.
High premiums for prompt deliveries.
380 cst $655
180 cst $658
MGO $940
Fujairah (delivered indications 24-11)
380cst $679
180cst $690
MGO $1045
Avails issue are sustaining the market.
ARA (Amsterdam - Rotterdam - Antwerp)
Bearish sentiment prevailed in the Northwest European bunker market Wednesday on dwindling crude prices amid ongoing eurozone concerns and disappointing Chinese macroeconomic numbers. 380 CST high sulfur fuel oil in Rotterdam edged lower following weaker FOB Rotterdam barges and softer buying interest over the day. Suppliers in Rotterdam and Antwerp continued 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 : $ 625
(1.0 %) :$ 655
180cst: $ 643
(1.0 %):$ 668
MGO 0.1%S: $955
