Crude-oil prices slipped in Asia Wednesday, with developments in Europe, surplus oil stocks and the likelihood of global oil demand weakening further weighing on prices. On the New York Mercantile Exchange, light, sweet crude futures for delivery in November traded at $90.89 a barrel at 0542 GMT, down $0.48 in the Globex electronic session. November Brent crude on London's ICE Futures exchange fell $0.52 to $109.93 a barrel. Nymex crude tracked a broader decline in U.S. stock markets overnight, after Federal Reserve Bank of Philadelphia President Charles Plosser said the Fed's quantitative easing measures may not help economic growth and could damage the central bank's credibility.
Tuesday morning oil prices initially tested their first supports as the euro edged lower. They were not able to sustainably breach these supports, however, and so there was a technical counter-reaction. First short-term resistances were breached but as new fundamental cues were lacking, upward potential was limited. Only as the common currency rebounded, given the planned deduction of 209 billion euros of liquidity by the ECB, oil futures sharply rose. The slightly bullish technical constellation and the oversold market situation favoured technical buying and so quotations at ICE tested their resistance lines. Better-than-expected US economic indicators also bolstered prices whereas the resistance lines for the Brent at 111.45 dollars, for the G.Oil at 981.00 dollars and for the WTI crude at 93.20 dollars remained strong. In late trade there was some technical profit taking as oil futures bounced off these resistances. Pessimistic comments by the president of the Philadelphia Fed, Charles Plosser, also weighed on prices. Plosser does not expect the third round of quantitative easing to prove successful, claiming that the relation of the costs resp. the risks and the use of it was not balanced. At ICE, oil futures nearly completely erased their gains, the WTI crude breached first supports, settling with considerable losses. The API's data, published at 10.30 p.m., came out mixed and did not significantly affect prices.
OPEC: While in 2008 the collaboration between the OPEC and Russia did not prove to be fruitful, both parties have resumed talks regarding a possible cooperation. Russia's energy minister Alexander Novak and the secretary general of the cartel, Abdalla Salem el-Badri, have thus recently met in Vienna. In the statements following the talks, both stressed the necessity of stable and predictable markets - for the oil industry as well as for the global economy. The cooperation is said to focus on the creation of a conjoint working group to exchange information and analyse the oil market.
ICE Gasoil contract for October delivery settled at 977.25 dollars on Tuesday. This was 11.00 dollars above Monday's settlement. With some 57,000 contracts the traded volume was on average.
At ICE, the stochastic indicator is still slightly bullish but its lines already converge which leads to expect that its impact vanishes. At the WTI chart, the indicator is in oversold territory and thus turned bearish again. Given the different signals at ICE and NYMEX charts, technical analysts assess the situation as neutral this morning. Resistance lines at ICE proved strong yesterday and might again cap the possible upward potential today.
U.S.
Nymex access retreating : Oil futures edged lower in early Asian trading and on Globex electronic trading platform this morning. The weaker euro, resp. the stronger dollar favoured a slight downward movement. The strong impact the forex market has had on oil futures in the past few days is likely to give direction ahead of the release of the DOE's data this afternoon. The traded volume is slightly above average. Market players will eye the performance of stock and forex markets today, as well as economic indicators and the DOE's data on oil inventories published at 4.30 p.m.
API's: Crude oil +0.3; distillates +1.0; gasoline +0.3 million barrels vs previous week. Refinery utilization +0.2%
DOE's; due out tonight
Forecasts: Crude oil +1.6; distillates +1.0; gasoline +0.3 million barrels vs previous week.
Houston (ex-wharf indications 25-9)
380cst $645
180cst $698
MGO $1050
New Orleans (ex-wharf indications 25-9)
380cst $653
180cst $703
MGO $1060
Singapore (correct as per 14:30hrs LT-delivered indications)
Crude is bearish with WTI -$2.04. Singapore paper is dropping with -$8.20 for 180cst and -$8.00 for 380cst for Oct, and for Nov 180 cst -$8.20 and 380cst -$7.95 with MGO contracts Oct -$1.07 and Nov -$1.02. The cargo market is steady with 180cst -$0.65, 380cst +$0.47 and MGO +$0.11.
The Singapore Fuel Oil markets were flattish; ranging -$0.5 to +$0.5 during the morning Platts window yesterday. The delivered bunker premiums lifted slightly higher to around $7.5 to $8.5 above cargo prices yesterday as crude values were higher after the window. Bunker fuel oil swaps gained app. $8/mt along the curve yesterday for the Singapore paper. This morning the market is trading down.
High premiums for prompt deliveries.
380 cst $650
180 cst $665
MGO $950
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 : $ 633
(1.0 %) :$ 679
180cst: $ 658
(1.0 %):$ 735
MGO 0.1%S: $956
