Oil Futures edged lower during morning trade, as investors have taken some profits. The WTI Crude has gained some ground, however, after it had breached its first support last night. The spread between the Brent and the WTI Crude thus narrowed to about 15 dollars. Traders are awaiting new impulsions provided by the opening of US markets this afternoon. In the morning, the GfK's survey showed that the sentiment among German consumers has renewedly improved, despite of economic insecurities and high gasoline prices. The index rose to 6.0 points in March from 5.9 a month ago.
Oil price's rally of the past few weeks saw a pause at beginning of this week. Without any news regarding an escalation of the Iran conflict, market participants took some profit. As the technical situation had already been overbought for days, a correction grew more and more likely, see also yesterday's chart analysis. Oil futures at ICE and NYMEX have already fallen through first supports on Monday morning. In the course of the afternoon, selling pressure slightly ebbed but at night further short term supports have been breached. The softer euro, resp. the strong dollar, made futures more expensive for investors outside the USA, additionally increasing their readiness to take profits.
ICE Gasoil contract for March delivery settled at at 1,032.25 dollars on Monday. This was 1.50 dollars above Friday's settlement. With some 48,900 contracts the traded volume was slightly below average.
Iran: The IAEA inspectors' final report on the latest visits to the Iran indicates a rapid expansion of installations for the enrichment of uranium within the past four months. Tehran has significantly raised the number of new technically, and more advanced centrifuges, which are used for the enrichment of uranium. The stocks of uranium which is enriched by 20% are to have increased to 110 kg. Experts say that about 125 to 200 kg of such material is needed to raise the enrichment to a level that is suitable for weapons. Although the Iran claims, its nuclear program only serves for power generation, experts take a critical stance towards these statements. Common reactors are usually operated with uranium enriched only by 3.5%. The Iran's current stocks would be sufficient to run the country's reactors for the next ten years, they add. Hence there is no reason to increase production capacities for fuel rods for purposes of power generation.
This morning, the stochastic indicator at ICE and NYMEX is to be interpreted as clearly bearish for the Brent and the WTI Crude, as well as for all product contracts. The RSI is still neutral, giving a selling signal only if the 70% line is breached. Moreover, the support lines of the Brent's, the G.Oil's and the WTI crude's trend channels are still intact. Despite of the stochastic indicator's selling impulsion in the overbought territory, technical analysts still take a neutral position this morning, given also the fact that yesterday's correction has already consumed part of the downward potential. Only if mid-term supports are breached and the RSI gives a selling signal, will the technical constellation turn bearish. Then there may be stop loss orders, making the downward correction continue. Should these impulsions not occur, however, oil futures will probably continue to consolidate on a high level.
U.S.
Nymex acces losing. Oil futures were hardly changed in Asian trading hours and on Globex electronic trading platform this morning. Futures both at ICE and NYMEX keep trading in a narrow range near yesterday's lows. The traded volume is only slightly below average. Market participants will look ahead to the European session, forex markets and economic indicators today, to receive new impulsions. Furthermore they expect the API's forecast of oil inventories tonight at 10.30 p.m.
Survey of US Petroleum inventories due out tonight at 22:30(API) and Thursday at 17:00(DOE)
Crude oil +1.4; distillates -0.2; gasoline +0.3 million barrels vs previous week
Houston (ex-wharf indications 27-2)
380cst $722
180cst $763
MGO $1067
Very tight avails for 180 cst
New Orleans (ex-wharf indications 27-2)
380cst $724
180cst $766
MGO $1069
Singapore (correct as of 1430hrs LT - delivered indications)
Crude is turning bearish with WTI +$0.32 Singapore paper is dropping as well with -$9.05 for 180cst and -$9.30 for 380cst for Mar, and for Apr 180 cst -$9.05 and 380cst -$9.30 with MGO contracts Mar -$0.11 and Apr -$0.12. The cargo market is yet to react, with 180cst +$1.12, 380cst +$1.72 and MGO -$0.17.
The Singapore fuel oil prices gained app. $1.5/mt yesterday morning. Market continues to be affected by demand issues in the region with suppliers reporting low uptake. The delivered bunker premiums were around $2.00 above cargo prices yesterday. Bunker fuel oil swaps gained app. $3/mt at the front and up to $6.5/mt at the backend of the forward curve. This morning markets are trading down.
High premiums for prompt deliveries.
380 cst $740
180 cst $752
MGO $1010
ARA (Amsterdam - Rotterdam - Antwerp)
The week started with variable demand as a slight increase in outright 3.5% Rotterdam barges following a slight increase in crude prompted some buyers to fix their deals early in the day. Suppliers in reported bullish sentiment over the day in ARA. High sulfur fuel oil supplies in Rotterdam remained tight sources said while some suppliers in Antwerp reported good supply availability for prompt. Low sulfur fuel oil supplies in Antwerp however remained tight due to some shortages at local refineries.
Rotterdam
Indications for delivered bunkers:
380cst : $ 707
(1.0 %) :$ 757
180cst: $ 758
(1.0 %):$ 799
MGO 0.1%S: $1025
