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On the back of weaker equities, oil prices have already lost considerable ground in the early morning, breaching first supports at ICE and NYMEX. Shortly afterwards, they have fallen through even more supports on technical selling orders which reinforced the downward movement. Last week's downbeat fundamental news put some pressure on quotations. Today, there has not been any fundamental news yet, so oil futures are likely to be driven by technical factors in the afternoon.

Oil prices opened lower in London and New York on Friday, weighed down by JP Morgan's trading losses, disappointing indicators from China, the IEA's monthly energy report and ongoing political uncertainties in the euro zone. When technical supports at 111.30 dollars (brent), 939.50 dollars (G.Oil) and 95.75 dollars (WTI) proved strong oil rebounded, regaining ground lost after the opening of NYMEX session when a better-than-expected Michigan consumer sentiment index boosted equities. But the rally was short-lived and when Wall Street erased gains and resistance lines proved strong, traders took profit on oil that hit its year low at 95.17 dollars in New York in the wake of the ailing euro that dropped below 1.29 dollars in Asian trading hours.

ICE Gasoil contract for June delivery settled at 950.75 dollars on Friday. This was 0.50 dollars above Thursday's settlement. With some 76,100 contracts the traded volume was well above average.

Opec: The Saudi Oil Minister Ali al-Naimi said at the weekend that his country would like to bring down the price of benchmark Brent crude to 100 dollars a barrel, as it was still too high. He expects global crude stocks to build ahead of an anticipated seasonal rebound in demand starting in July. Current crude supply was exceeding demand by between 1.3 million and 1.5 million barrels a day, contributing to a build in inventories that was needed ahead of a seasonal pickup in oil demand in the third and fourth quarters of the year, and in view of the European embargo on Iranian oil starting July 1st.

The Stochastic ocillator at the WTI chart is not giving any clear signals yet whereas it is still slightly bullish at the ICE charts. Oil markets are still strongly oversold but technical analysts expect prices to continue consolidating within their trendchannels with fresh technical momentum only arising if prices either breach key resistance lines or fall through supports.

U.S.

Nymex access losing: Oil prices trade in a narrow lateral range in East Asia and on Globex electronic trading platform this morning, operators being cautious in a market lacking direction. The traded volume is well above average. Due to a lack of economic indicators and fresh fundamentals market participants will eye forex and equity markets today.

Houston (ex-wharf indications 14-5)

380cst $656
180cst $701
MGO $995

New Orleans (ex-wharf indications 14-5)

380cst $657
180cst $701
MGO $995

Singapore (correct as of 1430hrs LT - delivered indications)

Crude is dropping like a stone with WTI -$1.99 Singapore paper is slowing, but losing still with -$4.50 for 180cst and -$5.10 for 380cst for May, and for June 180 cst -$4.55 and 380cst -$5.10 with MGO contracts May -$1.24 and June -$1.24. The cargo market is in line with crude and paper, losing with 180cst -$8.14, 380cst -$8.64 and MGO -$1.36.

The Singapore fuel oil markets fell more than -$8.0 during Friday morning. The delivered bunker premiums slipped to around $6.0 above cargo prices on weak crude movements after the window. Demand was said to be pretty firm on lower outright prices. Bunker fuel oil swaps lost nearly $2/mt at the front of the forward curve. Backend was slightly stronger, showing only a few cents loss. This morning markets are trading down.

High premiums for prompt deliveries.

380 cst $665
180 cst $670
MGO $935

ARA (Amsterdam - Rotterdam - Antwerp)

The ARA markets are quiet, despite the bullish inventory data. The Eastern arbitrage is at workable levels. The loading and barge congestions are improving.

Rotterdam

Indications for delivered bunkers:

380cst : $ 633
(1.0 %) :$ 682
180cst: $ 655
(1.0 %):$ 680
MGO 0.1%S: $930