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Crude-oil prices are trading lower Monday morning in London, continuing along a bearish trend seen late Friday as fundamental factors continue to override encouraging economic indicators.

In the wake of the easing euro, oil futures hit first support lines at ICE and NYMEX in electronic morning trading. But oil's losses were limited at this time of the day, market participants eyeing a key U.S. employment report for October. When the figures showed an unexpected rise in U.S. payrolls, even though the unemployment rate slightly rose, oil futures reversed their losses and first resistance lines were breached. The rising U.S. dollar that also profited from the positive employment report put a cap on oil, though, and tempted investors to cover their long positions ahead of the weekend. Oil prices continued to lose ground throughout the session and settled considerably lower when the U.S. government said it would take a series of steps to increase gasoline supply in the U.S. Northeast and waived the Jones Act.

ICE Gasoil contract for November delivery settled at 925.00 dollars on Friday. This was 17.25 dollars below Thursday's settlement. With some 47,300 deals the traded volume was below average.

News: Late Friday, the U.S. government temporarily waived the 1920 Jones Act which prevents foreign tankers from transporting fuel from one U.S. port to another. The Jones Act restricts tankers moving between U.S. ports to only those that are U.S. flagged, built, owned and manned. After the waiver of this act also foreign tankers are allowed to participate in fulfilling bottlenecks in demand. Meanwhile, more steps were taken to ensure fuel supply after Hurricane Sandy. The DoE released about 7.5 million litres of gasoil from the petroleum reserves and will continue to do so should this quantity not be enough. What's more, in case of a diesel shortage, public vehicles and those without a MOT approval are allowed to be run with gasoil.

The Stochastic oscillator at the ICE charts is still bearish but its two lines are converging, a sign that the indicator is losing its bearish impact. At the Brent chart, the RSI is set to breach the 30% line which would trigger a buying signal, while the WTI chart gives a mixed picture. The two lines of the stochastic oscillator have crossed; giving a selling signal, but the RSI has breached the 30% line and is thus bullish. Technical analysts are nevertheless still rather bearish, the more after the Brent had breached its medium-term support on Friday. This morning, oil prices are expected to consolidate as investors are seen covering some of their short positions after Friday's late losses.

U.S.

Nymex access steady: Oil prices are trading slightly higher in East-Asia and on Globex electronic trading platform this morning in a technical reaction to Friday's late losses but market participants are looking for direction that could come from the development of the euro. Apart from a couple of Chinese indicators that were released last night, there are only the ISM services PMI on the agenda today. The traded volume is well above average.

Houston (ex-wharf indications 5-11)

380cst $600
180cst $678
MGO $1015

New Orleans (ex-wharf indications 5-11)

380cst $602
180cst $678
MGO $1020

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

Crude is down, gaining with WTI -$1.97. Singapore paper is bearish still with -$15.75 for 180cst and -$17.00 for 380cst for Nov, and for Dec 180 cst -$16.25 and 380cst -$15.25 with MGO contracts Nov -$2.85 and Dec -$2.78 The cargo market is starting to react to paper, losing with 180 cst -$4.93 380cst -$2.79 and MGO -$1.23.

The Singapore fuel oil markets dropped between -$5.0 to -$2.5 during the morning Platts window last Friday. The Singapore fuel oil is still weak on demand while supply remains ample. The delivered bunker premiums were around $5.0-6.0 above cargo prices last Friday. Bunker fuel oil swaps posted app.$10/mt loss at the front of the forward curve slightly higher than Singapore. Backend of the curve was stronger for the paper, assessed down by app.$9/mt. This morning the market is trading down.

380 cst $595
180 cst $605
MGO $910

ARA (Amsterdam - Rotterdam - Antwerp)

High sulfur bunker fuel oil premiums for prompt delivery in Rotterdam remain firm on ongoing delays at some loading installations and despite ample supply in the ex-wharf barge market. Premiums for prompt can reach $3/mt to $10/mt above normal bunker quotes. LSFO avails are good.

Rotterdam

Indications for delivered bunkers:

380cst : $ 589
(1.0 %) :$ 625
180cst: $ 620
(1.0 %):$ 655
MGO 0.1%S: $935