Oil prices have climbed this morning, after they were not able to breach first supports, i.e. yesterday's lows. The stochastic indicator is no longer bearish for the Gasoil but currently is considered neutral. Investors regained some slight optimism ahead of US labour market statistics, that are to be published in the afternoon. The correction up was reinforced by both the euro and equities gaining some ground. Topics as the Iran, possible strikes in Nigeriaand Franceand Shell having declared force majeure on its Bonny Light exports also support oil prices. The European debt crisis as a factor with strong bearish potential remains yet in the background, as long as there is no decisive news. Currently oil futures slightly retreat from their highs.
Given the still bullish technical and fundamental situation, oil futures initially were steady in Londonand New YorkThursday morning testing their upward potential. Resistance lines at 975.00 dollar for the Gasoil, at 114.60 dollar for the Brent and at 103.75 dollar for the WTI crude proved strong, however, thus rendering possible some profit taking which was also reinforced by the strengthening dollar. In the afternoon investors reduced riskier assets waiting for new impetus from the DOE's inventories data. For this reason, oil prices remained in a narrow range then, before they briefly retreated when the DOE's data showed builds in all categories. There were only few selling orders shortly after the publication of the DOE's data, however, as Shell had declared force majeure on its Nigerian Bonny Light exports only some minutes earlier and as Petroplus' credit crunch exacerbated, given that even more of the company's credit lines had been frozen. Oil futures saw some correction up, before they lost considerable ground after 8 p.m., marking new lows.
EU diplomats announced yesterday, that they had generally agreed on an oil embargo against the Iran, though details as to the time of implementation had yet to be discussed. A spokesman of the Greek government confirmed that they would not oppose to an embargo. In December, Greece had not agreed on an embargo, worrying about its economic consequences for the debt-shaken country. Further sanctions against the Iranian central bank or a more general embargo against other economic sectors were also an option, the diplomats added. However, an agreement on these issues is unlikely before the reunion of the EU's ministers of foreign affaires on Jan 30th.
ICE Gasoil contract for January delivery settled at 964.75 dollars on Wednesday. This was +11.25 dollars above Tuesday's settlement. With some 70,900 contracts the traded volume was on average.
The stochastic indicator is not bullish anymore this morning. While it is neutral for most futures, its lines have already crossed in the G.Oil charts giving a first selling signal to markets. Technical analysts thus assess the situation as neutral by now, as long as oil futures do not fall below yesterday's lows. If they do so, and if the lines of the stochastic indicator also cross in the other futures charts, selling pressure is likely to increase triggering technical selling orders. For this reason, technical analysts expect some profit taking and a test of yesterday's lows. The WTI Crude's first support is seen at 101.30 dollars today, its first resistance at 103.75 dollars. The Brent's first support is seen at 112.10 dollars, its first resistance at 114.00 dollars.
U.S.
Nymex acces easing. Oil futures hardly change trading near yesterday's lows in East Asia and on Globex electronic trading platform this morning. The traded volume is on average. Market participants look ahead to the opening of European markets, to impulsions provided by foreign exchange, and today's economic data.
API's: Crude oil -4.4; distillates +5.2; gasoline +3.4 million barrels vs previous week. Refinery utilization +0.4%
DOE's; Crude oil +2.2; distillates +3.2; gasoline +2.5 million barrels vs previous week. Refinery utilization +0.8%
Forecasts: Crude oil -1.4; distillates +0.5; gasoline +1.0 million barrels vs previous week
Houston (ex-wharf indications 5-1)
380cst $663
180cst $698
MGO $993
Very tight avails for 180 cst
New Orleans (ex-wharf indications 5-1)
380cst $653
180cst $690
MGO $981
Singapore (correct as of 1430hrs LT - delivered indications)
Crude is easing somewhat, after the recent bullish sentiment with WTI -$0.89. Singapore paper is mirroring it, losing with -$6.20 for 180cst and -$5.75 for 380cst for Jan, and for Feb 180 cst -$5.55 and 380cst -$2.30 with MGO Jan contracts at -$5.55 and for Feb -$2.30. The cargo market is slowing, but not yet turning with 180cst +$5.61, 380cst +$6.70 and MGO +$2.14.
The Singapore fuel oil markets were up more than $5.5 during the Platts window. Current market fundamentals are looking tight for the short term and are expected to ease going forward into the month. The delivered bunker premiums softened to around $21.0 above cargo prices yesterday. Bunker fuel oil swaps gained $1-4/mt along the curve in Singapore and a few dollars more for Rotterdam 3.5% FOBbarges with gains on the higher side at the end of the forward curve. This morning markets are trading slightly higher.
High premiums for prompt deliveries.
380 cst $720
180 cst $735
MGO $960
Fujairah (delivered indications 6-1)
380cst $715
180cst $735
MGO $1050
Avails issue are sustaining the market.
ARA (Amsterdam - Rotterdam - Antwerp)
Bunker fuel values across Northwest Europe rose again Wednesday, with the fuel oil complex across the region bolstered by a firm underlying ICE Brent crude market. ICE Brent rallied on ongoing concerns over the EU/Iranian crude import relationship. Rotterdam high sulphur fuel oil barges were assessed at a premium of $21.25/mt to their comparable front-month swaps Wednesday, an unprecedented level on the back of a strong Singapore market and the anticipation of arbitrage flows from Rotterdam to the Asian hub. While a few vessels are slated to load January and two more load February, market participants expected a flurry of fixtures and to see the Rotterdam market tighten further.
Rotterdam
Indications for delivered bunkers:
380cst : $ 668
(1.0 %) :$ 711
180cst: $ 695
(1.0 %):$ 737
MGO 0.1%S: $966
