Tuesday morning, oil futures at ICE and NYMEX traded nearly unchanged to Monday's settlement prices. They were supported by the euro that was edging higher ahead of the G7 conference call during which the euro zone's debt crisis was to be discussed. Quotations have already fallen through first supports shortly after, however, when the euro plummeted on Spain officialy acknowledging its refinancing problems and on disappointing economic data from the euro zone. The results of the G7 conference call, during which the countries of the area had agreed on resolving the crisis promptly, were not providing any greater support either. Oil futures only slightly recovered in the course of the day, as the ICE G.Oil was unable to breach its support at 842.25 dollars sustainably and technical buying provided some momentum. In the evening, the better-than-expected US ISM-non-manufacturing PMI and the survey of US oil inventories, showing moderate draws in crude stocks, provided some support, particularly for the WTI crude. Thus oil futures at ICE and NYMEX settled slightly higher.The technical situation has hardly changed today, remaining slightly bullish. After the stochastic's lines have crossed at the beginning of the week, the indicator still gives a bullish signal in oversold territory, whereas the RSI also indicates an oversold market. However, analysts expect that the technical upward potential will be limited, assessing the situation rather neutral, as markets are currently predominated by fundamental factors and investors wait for today's economic indicators and the DOE's data. Oil futures have climbed after the opening of the European session, as equities marked considerable gains and the euro likewise advanced. First resistance lines have been breached and the ICE G.Oil has even exceeded its second resistance at 853.75 dollars. Currently oil prices slightly pull back from their highs as the WTI crude's second resistance remained strong.
ICE Gasoil contract for June delivery settled at 848,00 dollars on Tuesday. This was 5.00 dollars above Monday's settlement. With some 29,200 contracts the traded volume was far below average.
After disappointing economic indicators from the euro zone Tuesday morning, the US ISM non-manufacturing index came out better than expected in the evening, supporting oil markets. Market participants will now closely watch the economic data that are due this week and the DOE's oil inventories data to asses the current economic situation. For prices to remain stable, the continuing overproduction and the record oil stocks require a stable resp. increasing demand. Higher demand depends on economic recovery, however. If bullish factors lack, analysts expect prices to fall further down in the second half of the year.
The euro gained some ground against the dollar this morning, as market sentiment improved amid hopes the European Central Bank will implement more stimulus measures at its policy meeting later in the day. Market players presume that the ECB could announce liquidity injections in to Europe's troubled financial system. Other analysts expect the central bank to renew its suspended government bond-buying program to help ease pressure on Spain’s rising refinancing costs. Investors were also cautious after Moody’s ratings agency downgraded Tuesday evening the credit ratings of six German lenders and Austria’s three largest banks, saying they face risks if the euro zone crisis exacerbates. Moreover, risk-related currencies found strong support after official data showed earlier that first quarter economic growth in Australia outstripped expectations, with gross domestic product expanding 1.3%, well above forecasts. The euro last sold at 1.2515 dollar hitting its first resistance there. More resistances are seen at 1,2540 dollar, at 1,2590 dollar and at 1,26 dollar. Supports are seen at 1,2435 dollar, at 1,2410 dollar, at 1,24 dollar and at 1,2385 dollar.
U.S.
Nymex access gaining: Oil futures have climbed in Asian trading and on Globex electronic trading platform this morning showing a steady tendency. According to traders, the better-than-expected ISM non-manufacturing index, steadier Asian equities and the stronger euro are providing momentum. The traded volume is about on average. Market players now eye the performance of stock and forex markets, today's economic indicators and the DOE's data (to be published at 4.30 p.m).
The API reported a bigger-than-expected draw in US crude oil stocks and a rise in distillate and gasoline inventories as refiners ramped up production last week.
Cushing oil stocks rose again last week despite the general drop in US crude inventories. Traders store more oil there as refiner's oil demand has increased since they are now having more easy access to the Cushing inventories. With a 1,5% increase refinery utilization rose far above expectations, accounting for the drop in crude as does a decline in US oil imports last week. Despite the start of the summer driving season and the long Memorial Day weekend US gasoline demand dropped 3,7% last week according to MasterCard SpendingPulse, marking the biggest drop since late December. Gasoline use has lagged the year-ago level for 40 weeks in a row now. Despite this bearish situation the unexpected high drop in US crude stocks gives markets a slightly bullish signal this morning. The general assessment of the data is thus rather neutral.
Houston (ex-wharf indications 4-6)
380cst $575
180cst $611
MGO $895
New Orleans (ex-wharf indications 4-6)
380cst $578
180cst $615
MGO $899
Singapore (correct as of 1430hrs LT - delivered indications)
Crude is has hit is continuing to regain some ground with WTI +$1.53. Singapore paper is now taking the move more seriously with +$8.75 for 180cst and +$9.75 for 380cst for Jun, and for Jul 180 cst +$9.25 and 380cst +$9.10 with MGO contracts Jun +$0.95 and Jul +$0.96. The cargo market is now starting to turn to follow with 180cst +$1.74, 380cst +$1.76 and MGO +$1.39.
The Singapore fuel oil markets were up only around +$1.75 during the morning Platts window yesterday tracking the crude market. The Asian fuel oil cracks weakened significantly on strong selling pressure despite the stronger crude values. The delivered bunker premiums slipped to around $4.5 above cargo prices.
High premiums for prompt deliveries.
380 cst $580
180 cst $595
MGO $825
ARA (Amsterdam - Rotterdam - Antwerp)
The Northwest European fuel oil markets saw slightly rebounding prices yesterday. However, due to public holiday in UK, there were no Platts publications for the NWE market yesterday. This morning both markets are trading up. Oil prices are edging higher this morning as traders increase positions following the US economic data which was published yesterday. The US non-manufacturing data showed a slight improvement, with the ISM index rising to 53.7 from 53.5 points. With markets looking oversold following several weeks of heavy losses prices are now posting a technical correction. However, it is important to note that there has been no change in the global economic fundamentals to warrant reversal therefore any correction higher is expected to be short-lived.
Rotterdam
Indications for delivered bunkers:
380cst : $ 575
(1.0 %) :$ 615
180cst: $ 602
(1.0 %):$ 628
MGO 0.1%S: $860
