Even on Tuesday the traded volume remained below average and so quotations at ICE and NYMEX were still volatile. In the first half of the day oil futures consolidated on a high level within their technical range. But when euphoria over the new financial aids for Greece waned and the euro more and more retreated, investors at oil markets took some profit. Therefore, the Brent breached its mid-term support at 110.70 dollar in the course of the afternoon. This has triggered more technical selling orders. With the stochastic indicator's lines crossing there was another selling signal that accelerated the decline. Thus the WTI crude breached its important support at 87.35 dollar as well. Better-than-expected US economic data, released in the afternoon, could not prevent this technical downward reaction. Even though there was a slight counter-reaction in the evening, oil futures but trimmed their losses settling near their lows. The stochastic indicator's selling signals already showed yesterday afternoon but the indicator remains bearish this morning - slightly more at ICE charts than at the WTI's chart, see also technical analysis. After the mid-term supports had been breached, new downward slack has developed. As yesterday's decline took place against the backdrop of a rather low volume, technical analysts remain cautious today. According to them, there has not been any change of the trend so far. If there is no counter-reaction to Tuesday's price decline this morning, oil futures might renewedly test yesterday's lows in the course of the afternoon. Investors might remain cautious, though, as the DOE is to release its data on US oil inventories at 4.30 p.m.
ICE Gasoil contract for December delivery settled at 940.25 dollars on Tuesday. This was 7.75 dollars below Monday's settlement. With some 45,500 deals the traded volume was below average.
As long as the tensions in Egypt don't further escalate and the ceasefire between Hamas and Israel holds market participants are able to focus on other factors influencing the market, as for example the macroeconomic situation of the USA and Europe. Inspite of the new package of financial aid, market players don't expect that the "Greek case" is closed. The set objectives are in part considered as too ambitioned. Therefore, the negative impact of the European debt crisis might also more strongly weigh on oil markets again, if the EU's economic growth is hampered. Elsewhere, in the USA the democratic Senator Harry Reid has confirmed that the US budget talks have shown but "little progress" up to now. A spokesman of the White House avoided speak of an impasse, however. If US politicians can't reach an agreement in the budget talks, this is also likely to pressure oil prices as the USA is poised to slip into a recession in the next year, given a mixture of tax raises and spending cuts. The data on US oil inventories provided by the API last night indicate that stocks have increased more than expected which would have a more bearish impact than forecast. Market participants now wait for the DOE's figures, released at 4.30 p.m. this afternoon. In the course of December the builds in stocks should be less significant, however, as the companies will try to keep their inventories down for a more favorable balance, experts say.
The euro moved away from the previous session's one-month high near 1,30 US dollars in Asian trading, consolidating on a lower level and repeatedly trying to breach its first support this morning, as investors' relief about a new debt target for Greece turned to unease over the looming U.S. fiscal crisis. Concerns about the U.S. "fiscal cliff" of tax increases and spending cuts due to take effect from early next year support the dollar as a safe-haven currency. The U.S. Congress pushed toward compromise on Tuesday but an agreement still appeared elusive, despite growing pressure from business interests for action. Comments by U.S. Senate Majority Leader Harry Reid over the lack of progress among Democratic and Republican lawmakers fanned investors' concerns. The weakness of the yen vs other major currencies also supports dollar buying. The Stochastic indicator gave a bearish signal on Monday but it is still at a strongly overbought level that might tempt traders to take some more profit. Should the RSI fall through the 70% line an additionnal selling signal will be triggered. The euro last sold at 1,2929 dollars, having rebounded from its 1,2910 dollar support. More supports are seeen at 1,29 dollars, at 1,2875 dollars at 1,2865 dollars and at 1,2825 dollars today. Resistances are at 1,2945 dollars, at 1,2970 dollars, at 1,3005 dollars and at 1,3020 dollars.
U.S.
Nymex Access slightly bearish: Oil prices have traded more steadily in East-Asia and on Globex electronic trading platform this morning showing a slight technical counter-reaction on yesterday's profit taking. However, weaker Asian equities (Nikkei 225) and the softer euro are limiting gains. The traded volume is slightly below average. Market players now look ahead to the performance of stock and forex marekts today and some economic indicators. Moreover, they are waiting for the release of the DOE's data on US oil inventories.
Survey of US Petroleum inventories due out tonight at 16:30 (DOE)
Crude oil + 0.9; distillates +0.2; gaoline +1.2 million barrels vs previous week
APIs: +2.0; distillates +0.3; gaoline +2.3 million barrels vs previous week with refinery runs +1.4%
The build in oil product stocks is due to an increase in refinery run rates that normally brings about a rising demand for crude oil. As crude stocks also rose, the report is seen rather bearish but had no influence on oil prices yet. The DOE will release its report today at 4.30 p.m.
Houston (ex-wharf indications 28-11)
380cst $610
180cst $677
MGO $1015
New Orleans (ex-wharf indications 28-11)
380cst $622
180cst $658
MGO $1020
Singapore (correct as of 1430hrs LT - delivered indications)
WTI is now losing ground with -$0.97. The Singapore markets were following with paper for Dec 180cst -$9.00 and for 380cst -$8.75 and MGO -$1..42, Jan contracts were trading with 180cst -$9.00, 380st -$8.30 and MGO -$1.42. The cargo market is yet to adopt the bearishness but is showing signs of turning with 180cst +$0.44, 380cst +$0.30 and MGO -$0.28.
on $5.0 during the morning Platts window tracking stronger crude movements. The 380cst cargo premiums saw some support. Current delivered bunker premiums remain weak, seen around $1.75-2.00 above cargo prices. This morning the markets are trading higher.
High premiums for prompt deliveries.
380 cst $608
180 cst $619
MDO $926
Fujairah (delivered indications 28-11)
380cst $610
180cst $630
MGO $1020
ARA (Amsterdam - Rotterdam - Antwerp)
Northwest European bunker values edged lower Tuesday following a slight drop in FOB Rotterdam levels that tracked softer Brent futures, with market sentiment still cautious despite an agreement on a Greek bailout deal, sources said. Activity is slightly up on yesterday (which is not difficult) with alot of owners adopting a wait and see stance on prices in Rotterdam and Hamburg. Antwerp of avails of high sulphur continue to be problematic due to tightness in cutter product with resupply dates uncertain.
Indications for delivered bunkers:
380cst : $ 585
(1.0 %) :$ 607
180cst: $ 615
(1.0 %):$ 640
MGO 0.1%S: $ 918
