Oil futures traded slightly higher in London and New York Thursday morning, as a successful bond auction in Spain lifted investors' spirits. G.Oil and Brent breached first short term resistance lines, whereas they got nowhere near their mid term resistances. In the early afternoon forex traders took advantage of the stronger euro and raked in some profits, making oil futures retreat from their highs. Disappointing economic data weighed on equities and caused some profit taking on the oil complex, pressuring particularly the NYMEX Gasoline and WTI contracts. The WTI crude was also rather volatile, as the contracts for May delivery are going to expire today and investors shift their focus to the June contracts. Quotations at ICE proved firm, however, settling with modest gains, whereas the WTI crude remained lower, as in the past few days. The NYMEX Gasoline contracts marked the most considerable gains, as the negative economic data added to the weak demand and weighed on prices. The lines of the stochastic indicator have crossed at ICE charts, providing a new buying signal, whereas the indicator remains bearish for the WTI crude. The RSI at Brent charts approached the 30%-line and might also give a buying signal, if the indicator breaches this line bottom-up. Mid term resistance lines are still intact but might be tested in the course of the day, given the bullish technical constellation. Technical analysts thus expect that if the 999.00 dollars resistance for the G.Oil and the 119.15 dollars resistance for the Brent are breached, there will be more technical buying followed by a consolidation. If these resistances prove strong, however, there might be some profit taking.
ICE Gasoil contract for May delivery settled at 996.00 dollars on Thursday. This was +10.50 dollars below Wednesday's settlement. With some 77,600 contracts the traded volume was above average.
Chinese oil major Unipec has obviously raised its oil imports from Iran again in March. In January and February, China received far less Iranian oil, as there have been disputes over payment terms.
After an agreement in mid-February, market participants now expect that oil imports from Iran have climbed by some 280,000 barrels a day. The increase in imports from the Iran is likely to reduce substitute deliveries of other crude oil blends. This would weigh on prices.
The euro strengthened for a second day, while commodities gained after German business confidence unexpectedly improved this month. European stocks also gained ground.The Munich-based Ifo institute released its business climate index which came out at a nine-month high at 109.9, adding to evidence Europe’s largest economy can weather the debt crisis. Economists expected the indicator to drop. On the downside, The yield on the 10-year Spanish bond rose to more than 6 percent for the third day this week, with the similar-maturity Italian yield climbing three basis points to 5.65 percent. The cost of credit-default swaps insuring Spanish debt climbed five basis points to a record 503 and contracts on Italy jumped 18 basis points to 474, the highest level since January. The euro last sold at 1,3188 dollars. The single currency has support at 1,3115 dollar, 1,31 dollars, 1,3080 dollars and 1,3055 dollars today. Resistances are at 1,3165 dollar, 1,3175 dollars, 1,3190 dollars and 1,32 dollars.
U.S.
Nymex access gaining: Oil futures have edged higher in Asian trading and on Globex electronic trading platform this morning. The WTI crude hardly changed. The traded volume has been far below average. As to the WTI crude, market participants are gradually switching from the contracts for May delivery to those for June delivery, as the current front month is going to expire tomorrow. Investors now watch the performances of stock and forex markets and the few European economic indicators that are to be published this morning. NYMEX crude oil contract for May delivery expires tonight at 8.30 p.m.
The more actively traded month today is the new front month June. The traded volume of the May contract is therefore rather thin which makes the future volatile and susceptible to price fluctuations.
Market participants put their focus on the higher than expected builds in crude oil stocks first. These builds had a cleary bearish effect on oil futures. As these builds have mainly been accumulated at the USA's west coast, and as product stocks showed massive draws, the DOE's data also had a clearly bullish note which caused an upward correction after the initial profit taking. Only the WTI crude remained lower, as stocks in Cushing emerged higher. Crude oil stocks in Cushing rose to an 11-month high. US crude oil inventories in general also marked a 10-month high.
Houston (ex-wharf indications 20-4)
380cst $691
180cst $719
MGO $1040
New Orleans (ex-wharf indications 20-4)
380cst $694
180cst $722
MGO $1045
Singapore (correct as of 1430hrs LT - delivered indications)
Crude is changing direction again the losses slowing with WTI -$0.03. Singapore paper is in negative territory but only just with -$1.50 for 180cst and -$1.85 for 380cst for May, and for June 180 cst -$1.50 and 380cst -$1.85 with MGO contracts May +$0.05 and June +$0.06. The cargo market is bullish with 180cst +$2.58, 380cst +$3.37 and MGO +$0.37.
Asia's fuel oil market strengthened on Thursday, as buying momentum built up further with over a million tones traded for the first two intermonth contracts combined. The May/June time spread, which is the premium between the May and June swaps contract, gained 50 cents to close at $3.63/mt and traded higher at $3.80 after, more than 480,000 tones transacted. Bunker fuel oil swaps posted gains of up to $7/mt in the front of the forward curve both for Rotterdam and Singapore papers.
High premiums for prompt deliveries.
380 cst $710
180 cst $720
MGO $970
ARA (Amsterdam - Rotterdam - Antwerp)
Yesterday saw a very active day in the markets with alot of buying interest and tonnage traded. We are expecting another busy day today in the ARA region, although, high and low sulfur product remains very tight in Rotterdam, with better avails expected from the end of next week. Antwerp also is tight for low sulphur.
Rotterdam
Indications for delivered bunkers:
380cst : $ 683
(1.0 %) :$ 731
180cst: $ 708
(1.0 %):$ 762
MGO 0.1%S: $990
