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Crude prices shed most of Friday's gains in early Asian trading on Monday and dropped below first support lines at noon after a worse-than-expected ifo business climate indicator rekindled worries over the health of the euro zone economy. With oil demand in Europe and the US not picking up and oil producers planning to raise production, most analysts see more downside to oil this week and in the medium term.

Oil prices stabilised Thursday and traded slightly higher after their hefty losses in the first half of the week. They extended their gains into Friday and when the first short-term support lines proved strong rose above resistance lines to fresh highs late in the evening. Delays to Forties crude cargoes that were shifted from October to November supported the Brent before all. The crude oil in New York stayed muted, lingering below its first resistance for most of the session, breaches having been quickly followed by profit taking. Operators name as a reason for the rise in the Brent-WTI spread a high susceptibility of the Brent to production losses from the Arab world on the one hand and the high stocks of US crude on the other. Apart from that total US oil demand dropped to a 15-year low according to the API report.

OPEC: Global oil demand is poised to be depressed for the next 18 months while supply levels from OPEC countries are at fairly comfortable levels, the West's energy agency the IEA said. The IEA said it made no significant changes to its global oil demand outlook and forecast demand would grow at a steady rate of around 0.8 million barrels per day (bpd) or 0.9% in both 2012 and 2013. Some analysts said the oil demand outlook would probably be marked down by the IEA in the future.

ICE Gasoil contract for October delivery settled at 974.75 dollars on Friday. This was 11.50 dollars above Thursday's settlement. With some 67,100 contracts the traded volume was far above average.

The Stochastic oscillator gave a buying signal at the ICE charts on Friday and is seen bullish today. The one for the WTI, even though at the overbought level, is not clearly bullish as its two lines have not yet crossed. Technical analysts therefore assess the current technical market situation as somewhat bullish.

U.S.

Nymex access bearish : Oil prices lost ground in early Asian trading this morning as worries over the euro zone economy and the slowdown in China resurface and market players took profit after Friday's exaggerated gains. On Globex electronic trading platform oil prices compensated part of their losses. The traded volume is well above average. Market players will eye stock and forex markets today as there are only a couple of economic indicators scheduled.

Houston (ex-wharf indications 21-9)

380cst $650
180cst $702
MGO $1050

New Orleans (ex-wharf indications 21-9)

380cst $658
180cst $698
MGO $1060

Singapore (correct as per 14:30hrs LT-delivered indications)

Crude is stable with WTI +$0.76. Singapore paper is dropping with -$1.15 for 180cst and -$0.75 for 380cst for Oct, and for Nov 180 cst -$1.15 and 380cst -$0.75 with MGO contracts Oct -$0.10 and Nov -$0.10. The cargo market is bullish with 180cst +$17.38, 380cst +$17.32 and MGO +$2.00.

The Singapore fuel oil markets surged more than $17.0 during the morning Platts window. The delivered bunker premiums weakened to around $7.0 above cargo prices as the higher outright prices dampened buying interest. Supply in Singapore seems to be healthy at the moment with the latest Singapore heavy residual inventory reporting a build. Bunker fuel oil swaps last Friday gained app.$11/mt along the curve for Singapore papers. This morning the market is trading down.

High premiums for prompt deliveries.

380 cst $655
180 cst $670
MGO $960

ARA (Amsterdam - Rotterdam - Antwerp)

The ARA is well supplied, with some demand picking up, although the on-going maintenance at the Flushing refinery was still affecting high sulphur availability. With short cutter stocks underpinning the markets and a heavy maintenance programme for September with two important North Sea oilfields set for a one month closure. High premiums are charged for prompt enquiries.

Rotterdam

Indications for delivered bunkers:

380cst : $ 663
(1.0 %) :$ 682
180cst: $ 658
(1.0 %):$ 738
MGO 0.1%S: $960