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Oil prices dropped this morning, with only pending home sales in the USA are on the agenda this afternoon, which are not expected to have a great impact on oil. Therefore market participants will be cautious ahead of the release of US petroleum inventories and some important U.S. employment data to be released tomorrow and on Friday. The 105.00 dollar support for the Brent will be crucial for oil prices today, even though technical analysts expect it to prove strong.

Oil futures rose in electronic morning trading on Tuesday in a volatile market as traders returned from their long weekend. Optimism that Greece will stay in the euro zone after polls showed support for pro-bailout parties at the upcoming elections in June bolstered sentiment. When Spain's central bank cautioned against a recession in the second quarter after Spain's economy had shrunk already in the two quarters before, the euro received a blow and oil prices followed in the track. After the opening of US markets oil rebounded as the Dow Jones gained more than one percent within a few minutes, jumping to over 12.600 points, carried by Greece optimism and the bullish technical constellation. The collapse came when a small US rating agency downgraded Spain's credit rating, pressuring the euro that dropped below its 1.25 dollar key level, taking oil futures with it. Oil prices eventually settled significantly lower in London and New York.

ICE Gasoil contract for June delivery settled at 911.00 dollars on Tuesday. This was 1.00 dollars above Monday's settlement. With some 48,100 contracts the traded volume was below average.

RSI and Stochastic indicators are neutral at ICE and NYMEX charts today, giving no fresh momentum as Tuesday's buying signals have evaporated. Technical analysts are neutral for the time being but caution that, should the Stochastic oscillator's lines cross, selling signals would be triggered. The upper limits of the Brent's and the WTI's downtrend channels having proved strong once again Tuesday, upside is limited.

U.S.

Nymex access losing: Oil futures are trading lower in East-Asia and on Globex electronic trading platform this morning, extending Tuesday's losses as the euro remains under pressure from Spain worries. The traded volume is about on average. Investors eye stock and forex markets and a couple of relevant indicators for direction today.

Houston (ex-wharf indications 29-5)

380cst $628
180cst $672
MGO $955

New Orleans (ex-wharf indications 29-5)

380cst $629
180cst $678
MGO $947

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

Crude dropped with -$1.93, while Singapore paper bearish as well, losing with -$8.15 for 180cst and -$8.90 for 380cst for Jun, and for Jul 180 cst -$8.35 and 380cst -$8.55 with MGO contracts Jun -$2.30 and Jul -$2.31. The cargo market is starting to track the bearish sentiment with 180cst -$0.91, 380cst -$1.44 and MGO -$0.02.

The Singapore fuel oil markets fell by $1.0 to 1.5/mt during yesterday morning. The market continues to see strong selling interest, which has further widen the fuel oil cracks. The delivered bunker premiums slipped to around $6.0 to $7.0 above cargo prices yesterday. Bunker fuel swaps gained few cents, lifting the whole curve slightly higher. This morning however, markets trade down pricing in an overnight weakness of the crude futures.

High premiums for prompt deliveries.

380 cst $635
180 cst $650
MGO $890

ARA (Amsterdam - Rotterdam - Antwerp)

Mirroring crude, all oil levels dropped on a weaker Euro. Most suppliers are fully booked till the end of the month, with cargoes only expected at the end of this week.

Rotterdam

Indications for delivered bunkers:

380cst : $ 614
(1.0 %) :$ 659
180cst: $ 638
(1.0 %):$ 670
MGO 0.1%S: $894