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In the wake of weaker equities and a declining euro, oil futures lost considerable ground during morning trade, falling through first supports at ICE and NYMEX. Investors were also disappointed by the outcome of the mini-summit (Germany, France, Italy, Spain) and so remain cautious. Worries on the European economies increased as Spanish interest rates increased, causing investors to seek shelter in the US Dollar. The Chinese economic data are also causing some worries.

Oil prices traded lower Friday morning, accelerating the week's losses in the wake of a decline in equities and the ailing euro. Negative market sentiment and a rather bearish technical constellation also weighed on the oil complex. After the brent had hit a fresh long-term low at 88.49 dollars and the WTI dropped to a 9-month low of 77.56 dollars, prices stabilized on short-covering ahead of the weekend. Strong support lines and oversold markets triggered a modest technical upward correction that analysts had expected.

ICE Gasoil contract for July delivery settled at 812.00 dollars on Friday. This was 10.00 dollars below Thursday's settlement. With some 57,600 contracts the traded volume was about on average. The two lines of the Stochastic oscillator have converged at ICE and NYMEX charts, giving markets a buying signal, see also technical analysis. Technical analysts had forecast such a technical upward correction on Friday and so they consider the market as modestly bullish today.

U.S.

Nymex access losing: Oil futures lost some ground in Asian trading and on Globex electronic trading platform this morning in the wake of ailing Asian equities and the decline of the euro. The traded volume was little above average. Traders will eye the performance of stock and forex markets today. As for the economy, there are only a few indicators on the agenda today.

Houston (ex-wharf indications 25-6)

380cst $553
180cst $598
MGO $867

New Orleans (ex-wharf indications 25-6)

380cst $563
180cst $598
MGO $870

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

Crude is bouncing up slightly, recorrecting after the hefty losses with WTI +$0.89. Singapore paper is turning slightly as well with +$2.05 for 180cst and +$3.00 for 380cst for Jul, and for Aug 180 cst +$2.05 and 380cst +$3.10 with MGO contracts Jul -$0.05 and Aug -$0.04. The cargo market is not yet reacting, losing with 180cst -$13.36, 380cst -$12.91 and MGO -$1.82.

The Singapore fuel oil markets fell more than $14.0 during the morning window yesterday tracking crude movement. The Asian crack narrowed significantly held by strong buying interest. The bunker premiums remained around $8.5 above cargo prices. Bunker fuel oil swaps lost nearly $21/mt at the front of the forward curve. Backend was again slightly stronger, posting app.$16/mt losses. This morning markets are trading slightly higher.

High premiums for prompt deliveries.

380 cst $575
180 cst $585
MGO $800

ARA (Amsterdam - Rotterdam - Antwerp)

The avail constraints continue to underpin both hsfo and lsfo levels, despite falling crude prices. Not much relief is expected within the next couple of weeks, with continuing loading delays.

Rotterdam

Indications for delivered bunkers:

380cst : $ 544
(1.0 %) :$ 578
180cst: $ 568
(1.0 %):$ 594
MGO 0.1%S: $810