Oil futures initially kept yesterday's gains but the advancing dollar has put them under some pressure in the morning. Weak equities likewise weighed on oil prices. NYMEX C.Oil has dipped, falling below its support at 100.00 dollars and triggering some technical selling orders. Only the ICE G.Oil's strong support at 941.25 dollars has kept prices from declining further and has triggered a correction up, so oil futures have been able to pare some of their losses around noon. There has been no decisive news this morning. According to forex traders, the euro had already been extraordinarily high in the middle of the week, given the euro zone's ongoing debt crisis. It seems as though some investors would like to reduce their long positions ahead of the weekend.
Yesterday, oil futures in Londonand New York traded sideways in a narrow range for the most part. Better than forecast US employment data (weekly jobless claims) as well as the strong euro supported prices. The WTI crude tested its resistance at 102 dollars but was not able to remain above this level in the long run, as market players were waiting for the DOE's publication of USoil inventories later that day at 5 p.m.With builds in products and draws in crude oil, the data did not show any clear direction. Therefore their immediate effect on oil prices was rather scarce. However, the bearish demand outweighed other factors triggering more profit taking. Oil futures only stopped near Wednesday's lows, resp. near the 100 dollar mark for the WTI crude. The advancing euro, gaining equities and new reports regarding the EU sanctions against Iran triggered an upward correction particularly regarding ICE futures.
ICE Gasoil contract for February delivery settled at 943.25 dollars on Thursday. There was no change compared to Wednesday's settlement. With some 61,100 contracts the traded volume was above average.
EU diplomats seem to approach a solution regarding the planned oil embargo against the Iran. Some diplomats say that politicians will probably agree on July 1 as date of initiation for the embargo. Thus, countries that are importing Iranian oil would have 5 months to find alternative suppliers. A further delay of the embargo might be possible, though, as the EU is to examine the economic effects of the embargo in two or three months.
The Stochastic oscillator is slightly bullish for the Brent this morning. As for the WTI crude, the indicator is already changing direction, whereas it is on an oversold level for the Gasoil but does not provide any impulsions. The technical constellation is hardly able to give decisive impulsions currently, as the development on the market is dominated by the euro zone's debt crisis and the anticipated resolutions regarding sanctions against the Iran. Analysts thus expect oil futures to consolidate on a high level. The strong euro may give some additional support.
U.S.
Nymex acces gaining. Oil futures edge higher in Asian trading hours and on Globex electronic trading platform this morning. The strong euro, advancing equities in Asiaand reports regarding the earlier-than-assumed realisation of embargos against the Iranian oil industry are considered to have provided support. The traded volume is slightly below average. Market participants look ahead to the development at European markets, new impetus from foreign exchange and today's economic indicators.
API's: Crude oil -4.8; distillates -0.9; gasoline +4.3 million barrels vs previous week. Refinery utilization -1.7%
DOE's; Crude oil -3.4; distillates +0.4; gasoline +3.7 million barrels vs previous week. Refinery utilization -1.9%
Forecasts: Crude oil +2.9; distillates +2.2; gasoline +2.9 million barrels vs previous week
Houston (ex-wharf indications 19-1)
380cst $678
180cst $713
MGO $994
Very tight avails for 180 cst
New Orleans (ex-wharf indications 19-1)
380cst $681
180cst $716
MGO $997
Singapore (correct as of 1430hrs LT - delivered indications)
Crude is slowing, but bullish still with WTI +$0.38. Singapore paper is back on its bullish track with +$4.00 for 180cst and +$4.60 for 380cst for Feb, and for Mar 180 cst +$4.00 and 380cst +$4.55 with MGO Feb contracts +$0.30 and for Mar +$0.30. The cargo market is reacting to the bullish sentiment with 180cst -$3.77, 380cst -$3.48 and MGO -$0.37.
The Singapore fuel oil markets were down more than -$3.25 during the morning Platts window yesterday tracking crude movement. Market continues to be supported by strong buying interest in fuel oil swaps which further narrowed the cracks. The delivered bunker premiums were seen around $26.25 above cargo prices. This morning markets are trading marginally higher.
High premiums for prompt deliveries.
380 cst $734
180 cst $743
MGO $950
Fujairah (delivered indications 20-1)
380cst $729
180cst $753
MGO $1045
ARA (Amsterdam - Rotterdam - Antwerp)
Bunker demand in Northwest Europebunker market remained supported Thursday on the back of ongoing high sulfur fuel oil tightness in ARAand ongoing concerns about sanctions possibly being imposed on Iran. The Rotterdam 380 CST high sulfur bunker fuel premium to 3.5% FOBRotterdambarges soften a bit Thursday after hitting a record high of $19.25/mt Wednesday on tightening HSFO supplies and severe congestion at loading installations. Typically, in a steeply backwardated market any delays caused by congestion prompts higher costs for buyers and suppliers. More fixtures were expected however, as the arbitrage had stayed economic due to weakening Rotterdam prices compared to Singapore. According to sources, although HSFO barge premiums dropped over the last week in Rotterdam, bunker fuel was not following this trend.
Rotterdam
Indications for delivered bunkers:
380cst : $ 669
(1.0 %) :$ 683
180cst: $ 682
(1.0 %):$ 728
MGO 0.1%S: $945
