Oil prices eased today as worries about Europe's debt crisis help sending the dollar to fresh highs against the euro, weighing against fears of European sanctions on Iranian crude oil. Brent breached its first supports in the morning. Due to the low volume, market volatility is high.
Yesterday, oil futures rose in electronic morning trading after the brent's and the G.Oil's first support lines were hit early and proved strong. The dollar loosing ground at this time of the day and higher European equity markets provided the necessary bullish momentum. The euro was helped up by better-than-expected German indicators. At noon, market participants thought better and oil prices pared earlier gains on a wave of profit taking. Fitch's downgrading of Portugal and the unsolved problems of the French-Belgium bank Dexia weighed on equity markets and the euro, also affecting oil prices that reversed their gains after first resistance lines proved strong (108.15 dollars Brent). As expected, volume was very thin due to Thanksgiving day in the USAand oil prices settled only slightly higher in the end, staying within their trading range as analysts had forecast.
ICE Gasoil contract for December delivery settled at 949.50 dollars on Thursday. This was 3.50 dollars above Wednesday's settlement. With some 21,900 contracts the traded volume was far below 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 remains modestly bullish, while the one for the WTI crude and the G.Oil contract at the ICE is still regarded neutral. The oversold market situation still encourages an upward correction, but key resistance lines having proved strong so far, upside is limited. Without any fresh fundamentals hitting the markets, oil prices are seen poised in consolidation also today. Only above resistance lines or below the supports will more momentum be triggered. The WTI is supported at 95.35 dollars today, its first resistance is seen at 97.30 dollars. The Brent's first resistance is seen at 107.60 dollars, its first support is at 107.20 dollars.
U.S.
Nymex acces losing. Oil futures are mixed in Asia and on Globex electronic trading platform this morning, crude oil losing a bit of ground while oil products post modest gains as traders are seeking direction. The traded volume is above average as orders placed after Thursday's close were processed tonight right after the opening. Due to Thursday's Thanksgiving holiday, trade is expected to stay thin also 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 -$0.39. Singapore paper is losing, but slowing with -$0.55 for 180cst and -$0.60 for 380cst for Dec, and for Jan 180 cst -$0.55 and 380cst -$0.60 with MGO Dec contracts at -$0.45 and for Jan at -$0.45. The cargo market is fully reacting to the bullish start of the week with 180cst -$2.48, 380cst -$2.95 and MGO -$1.46.
The Singapore fuel oil markets fell only between $2.50- 3.00/mt during the Platts window yesterday. Market fundamental remains firm currently and supply is expected to ease with more incoming cargoes forward. The delivered bunker premiums were around $16.00 above the cargo prices yesterday. This morning markets are trading down.
High premiums for prompt deliveries.
380 cst $652
180 cst $655
MGO $930
Fujairah (delivered indications 25-11)
380cst $665
180cst $697
MGO $1040
Avails issue are sustaining the market.
ARA (Amsterdam - Rotterdam - Antwerp)
Liquidity in the Northwest European bunker market was fairly light Thursday, with a lackluster day due to the US Thanksgiving holiday prompting reduced buying interest amid little news. High sulfur fuel oil in ARA remained very tight on limited blending stock availability, with one VLCC expected to load late November and other three VLCCs scheduled to load December for Singapore. 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 : $ 617
(1.0 %) :$ 646
180cst: $ 631
(1.0 %):$ 661
MGO 0.1%S: $951
