Oil futures at ICE and NYMEX already climbed Wednesday morning, bolstered by a postitive market sentiment at Asian stock exchanges. The recovering euro which marked gains ahead of the ECB's reunion, likewise supported oil prices. Some investors expected that the central bank would decide on new measures of monetary policy to stabilise the markets. First resistances have soon been breached, while oil futures were in oversold territory. Technical buying orders were triggered, leading to an even sharper increase in prices. Some momentum was also still provided by the US ISM non-manufacturing index which was released on Monday. Around noon, the ICE Brent climbed back above the 100.00 dollars threshold. Even though the ECB left its benchmark interest rate unchanged and gave little cues as to further measures concerning its policy, positive market sentiment prevailed also in the afternoon. The DOE's bearish data on US oil inventories had little impact on oil futures shortly after their release. Later in the evening, however, they weighed on the WTI crude, capping its gains. Reports on Iran warning the EU that the success of the nuclear talks might be at stake, stoked renewed concerns that the conflict might escalate. Eventually, oil futures at ICE and NYMEX settled with some gains. The RSI and the stochastic indicator still signal a significantly oversold market, indicating an upward movement. After resistance lines at ICE and NYMEX were breached yesterday, technical analysts assess the situation as rather bullish today. If the RSI breaches the 30%-line in the course of the day, further technical buying orders will be triggered. The RSI and the stochastic indicator still signal a significantly oversold market, indicating an upward movement. After resistance lines at ICE and NYMEX were breached yesterday, technical analysts assess the situation as rather bullish today. If the RSI breaches the 30%-line in the course of the day, further technical buying orders will be triggered.
Oil futures have pulled back from yesterday's high settlement level as the DOE's data have developed more impact today and investors have taken some profit. Supports at ICE and NYMEX have been breached. The Brent even briefly fell below 100 dollars again but its support at 99.70 dollars has proved strong, limiting losses.
ICE Gasoil contract for June delivery settled at 865,50 dollars on Wednesday. This was 17.50 dollars above Tuesday's settlement. With some 46,700 contracts the traded volume was slightly below average.
Despite of overproduction, record oil stocks and a continuously sinking demand, oil markets are sensitive for negative news, as yesterday's reports on Iran showed. Even though a complete shortfall of Iranian oil imports could be fully compensated for, market participants still worry about the impact of an escalation of the conflict, should the negociations regarding Iran's nuclear program not bring about a peaceful solution. Basically, the market situation remains bearish, however. The weak oil demand remains unaffected by speculations about new measures of monetary easing implemented by the central banks.
The euro rose against the dollar on Wednesday as traders looked to a European Central Bank policy meeting and possible easing measures.
Sentiment dropped only temporarily when the ECB announced no change to its 1.0% interest rate and no clear statements were made. The vague hopes of more policy action, both in Europe and the United States, led short-term players to wind back their massive bets against the currency and bolster the euro also this morning. Market players think there are still massive short positions in the euro as data from a U.S. financial watchdog showed speculators' short position in the euro was at a record high last week. "This is driven by position unwinding, rather than full-fledged risk-on trade. Some are looking to start fresh selling but there could be more short-covering before that", so say an analyst. Speculation of more stimulus from the U.S. Federal Reserve when it meets June 20 also support risk assets such as the euro.
The euro is still bullish at the chart but the Stochastic oscillator has entered the overbought level while the RSI is still neutral. The euro last sold at 1,3146 dollars down from 1,1,2580 dollars last night. The single currency has support at 1,2540 dollars, 1,2490 dollars, 1,2470 dollars, 1,2440 dollars today. Resistances are at 1,2585 dollars, 1,26 dollars, 1,2625 dollars, 1,2650 dollars.
U.S.
Nymex access gaining: Oil futures traded little changed in Asian trading and on Globex electronic trading platform this morning but have lost ground shortly before the opening of the European markets. First supports have been breached as investors took some profit and the DOE's data developed more impact. The traded volume is about on average. Market players now look ahead to the performance of stock and forex markets, today's economic indicators news from the Iran.
Survey of US natural gas storage volumes according to EIA:
to be released later today for the week till June 01: +57,0 bcf (billion cubic feet) vs the previous week.
The DOE's data showed higher than forecast builds in product stocks and slight draws in crude oil stocks, while refinery runs increased significantly. The figures in detail were as follows:
The DOE's data confirmed the API's forecast that refinery runs had significantly increased. This rise contributed to the massive builds in product stocks. Moreover, gasoline and distillate demand have retreated in the reported week (gasoline -0.283 mbpd to 8,648 mbpd, distillates -0.481 mbpd to 3,379 mbpd). Cushing crude stocks have hit a new record high, being 22.8% higher than in the previous year. The data are thus clearly bearish but their impact was eclipsed by news regarding Iran yesterday evening.
Houston (ex-wharf indications 6-6)
380cst $570
180cst $606
MGO $875
New Orleans (ex-wharf indications 6-6)
380cst $573
180cst $609
MGO $879
Singapore (correct as of 1430hrs LT - delivered indications)
Crude seems to have run out of steam on its recovery with WTI -$0.71. Singapore paper is slowing in its climb never having really adopted the crude bullishness with +$4.95 for 180cst and +$4.90 for 380cst for Jun, and for Jul 180 cst +$5.75 and 380cst +$6.35 with MGO contracts Jun +$0.62 and Jul +$0.53. The cargo market is catching up on moves upwards with 180cst +$8.54, 380cst +$9.76 and MGO +$1.03.
The Singapore fuel oil markets were up only around +$8.5 during the morning Platts window yesterday tracking the stronger crude. The delivered bunker premiums were higher to more than $6.0 above cargo prices yesterday as the crude strengthen after the window.
High premiums for prompt deliveries.
380 cst $590
180 cst $600
MGO $825
Fujairah (delivered indications 7-6)
380cst $605
180cst $625
MGO $1030
ARA (Amsterdam - Rotterdam - Antwerp)
The NWE fuel oil prices posted double digit gains yesterday. Sentiment in the Northwest European bunker market was bullish Wednesday following higher oil prices that followed the rising trend in European equities and ongoing tightness for prompt in Rotterdam, sources said. Avails are particularly tight at the moment with RMG 380 CST loading a real problem with reportedly only one or [two] tanks are free for delivery. The drop in prices, therefore, have not been reflected in Rotterdam. Shortages in Rotterdam were largely prompted by limited cutterstocks in the region to blend straight run into RMG and some Suezmaxes loading for Asia last week. Delivered 380cst in Rotterdam was up by app$14/mt while cargo prices were slightly weaker, gaining app.$11.5/mt. Product avails in Rotterdam remain tight while Hamburg port reported difficulties with prompt product avails.
Rotterdam
Indications for delivered bunkers:
380cst : $ 576
(1.0 %) :$ 620
180cst: $ 603
(1.0 %):$ 633
MGO 0.1%S: $855
