Given the better-than-expected German and European GDP, financial markets received some momentum. Equities marked considerable gains at the open, and the euro also moderately advanced. Oil futures at ICE and NYMEX likewise climbed, breaching first resistance lines. In the afternoon the US Empire State Manufacturing Index (May) provided some additional support, making the WTI crude briefly rise above its key resistance at 95.00 dollars. Reports about Greece facing new elections dampened investors' risk appetite, however. The euro and the DAX plunged in the course of the afternoon. This led to some profit taking at oil markets. As investors are more likely to have left some long positions in WTI crude contracts than in other contracts, the US benchmark blend lost more ground. During late trade, the WTI crude fell through several supports, marking a 6-month low at night. The API's data which were published at 10.30 p.m. renewedly showed massive builds in crude oil stocks. These weighed on oil futures until this morning prompting investors to take more profit.
The stochastic indicator is still neutral for Brent this morning and did not give any selling signal yesterday. For the WTI crude and for the G.Oil the indicator is bearish in oversold territory. The technical constellation thus indicates that profit taking will continue and oil futures will renewedly test their downward potential. As there are no selling signals from the stochastic indicator yet, the Brent still a little less bearish than the G.Oil and the WTI, both of which have fallen below their supports at 929,75 dollars, resp. 92.05 dollars by now. If the stochastic's lines cross at the Brent charts in the course of the day, there might be further technical selling orders. In this case, the Brent might see a correction down to 110 dollars. Technical analysts also highlight the DOE's data on US oil inventories, which are likely to have a decisive impact on prices in the afternoon.
ICE Gasoil contract for June delivery settled at 932.25 dollars on Tuesday. This was 1.75 dollars below Monday's settlement. With some 81.700 contracts the traded volume was well above average.
European equity markets opened in the red this morning, weighed down by worries over the situation in Greece. In their wake oil prices tumble along with the ailing euro that continues its decline vs the dollar in the morning. First support lines were breached at ICE and NYMEX and technical selling orders are triggered. There is no fundamental news in the markets.
The euro fell to the lowest level in almost four months vs the dollar this morning after Greece’s political leaders failed to form a ruling coalition, deepening speculation the country will have to leave the currency bloc. Demand for the shared currency was damped before Greek leaders seek agreement today on an interim government that will schedule new elections. Still analysts see not much more downward potential for the euro as traders have already priced in any negative news arising from the Greece problem. The euro is still strongly oversold but its indicators are not giving any new signals yet. The single currency last sold at 1,2689 dollars down from 1,2728 dollars last night. The single currency has support at 1,2685 dollars, 1,2660 dollars, 1,2625 dollars today. Resistances are at 1,2740 dollars, 1,2770 dollars, 1,28 dollars, 1,2555 dollars.
Envoys of the Iran and the International Atomic Energy Agency have agreed on continuing with their talks on May 21st, IAEA chief inspector Hermann Nackaerts said. "We had a good exchange of views and we will meet again on Monday," he told journalists.
U.S.
Nymex access losing: Oil prices traded lower in East Asia and on Globex electronic trading platform this morning, as market players adjusted their riskier positions and took some profit after last night's API data on US oil inventories. Losses at stock markets and the declining euro also weighed on oil futures. The traded volume is above average. Market participants will eye forex and equity markets, today's economic indicators see economic calendar as well as the DOE's data which will be published in the afternoon.
The API reported once again a strong build in US crude oil inventories, the twelfth in a row. Product stocks dropped more than expected and refiners curbed production last week. At Cushing inventories keep rising.
The big increase in US crude stocks gave a selling signal, tempting traders to take some profit in an already bearish market. In this context the steep drop in refined product stocks isn't paid much attention to. Market players continue to stock oil at the Cushing hub to take advantage of the of the pending opening of the Seaway pipeline. MasterCard Spending Pulse shows US gasoline demand at 8,976 million bpd last week, a 4.5% increase. Market participants are now expecting DoE data in the afternoon.
Houston (ex-wharf indications 16-5)
380cst $643
180cst $671
MGO $979
New Orleans (ex-wharf indications 16-5)
380cst $645
180cst $674
MGO $982
Singapore (correct as of 1430hrs LT - delivered indications)
Crude is losing more with WTI -$2.00 Singapore paper is slightly cautious in its reaction with -$3.45 for 180cst and -$4.30 for 380cst for June, and for July 180 cst -$4.20 and 380cst -$4.30 with MGO contracts June -$0.46 and Juy -$0.47. The cargo market is only just reacting to the bounce, with 180cst +$9.29, 380cst +$7.99 and MGO +$4.64.
The Singapore markets were assessed nearly $8/mt up during the morning Platts window supported by crude rebound yesterday. Bunker fuel oil swaps were up by $6.5-5.5/mt at the front of the forward curve both for Singapore and Rotterdam papers. Backend of the curve was weaker posting only up to $1/mt gains.
High premiums for prompt deliveries.
380 cst $665
180 cst $673
MGO $920
Fujairah (delivered indications 16-5)
380cst $675
180cst $695
MGO $1050
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 : $ 638
(1.0 %) :$ 678
180cst: $ 661
(1.0 %):$ 676
MGO 0.1%S: $925
