After trade had been rather subdued early Thursday morning, oil prices soon gained some ground approaching their first resistance lines. Hopes that US lawmakers will find an agreement over the budget by the end of this year, which would avert the looming fiscal cliff and a recession, have supported the euro and equities and, thus, also oil prices. Moreover, experts had already expected a technical upward correction after the considerable losses in the previous days. After first resistance lines had been breached, oil futures' rise accelerated and further technical buying orders were triggered. The geopolitical situation also slightly bolstered prices in the afternoon. The growing unrest in Egypt, where opponents of President Mursi manifest, and the IAEA chief Amano's urgent call for finding a peaceful solution to the dispute over Iran's nuclear program have renewedly stoked fears of an escalation of the tensions in the Near East. The release of US data on pending home sales, which came out far better than expected, bolstered the dollar and thus limited oil futures' gains, as did their strong resistances. Still, oil futures settled with gains at ICE and NYMEX yesterday.The stochastic indicator gave a buying signal at ICE and NYMEX charts yesterday, after its lines had crossed. Given yesterday's gains, that most investors regard as exaggerated, the bullish potential has to a great extent already been spent. The RSI moves in the neutral zone, approaching the 30%-line, but does not give any clear clues yet. If the indicator falls below this line, it turns bearish. Even though oil prices nearly pared this week's losses yesterday, the short-term down trend is still intact and so technical analysts take a rather neutral stance this morning.
ICE Gasoil contract for December delivery settled at 948.75 dollars on Thursday. This was 16.75 dollars above Wednesday's settlement. With some 38,700 deals the traded volume was below average.
In its last publication, the EIA has revised down US oil demand in September 2012 (on year). Crude oil demand dropped by 3.8% or 719,000 bpd to a 4-year low. US Diesel and gasoline demand have also retreated. While gasoline demand showed the lowest monthly decline in 2012, distillate demand fell to the lowest reading in September since 2009.
• Sept crude oil demand: -3.8% to 18.173 mbpd
• Sept gasoline demand: -1.9% to 8.575 mbpd
• Sept distillate demand: -6.5% to 3.681 mbpd
OPEC oil exported by seaway is to drop by some 30,000 barrels per day in the four weeks until December 15, according to the British service Oil Movments.
On Thursday the US fiscal cliff was in the centre of operators' attention. Hopes that a quick solution to the problem will be found supported the euro and weighed on the safe-haven dollar. Also this morning the euro profits from the comments of US president Barrack Obama and its republican counterpart John Boehner who are optimistic to find a solution still this year. The euro experienced temporary pressure Thursday after the release of better-than-expected uS housing data that pushed the dollar and weighed on the single currency. But the euro rebounded, paring its losses in Asian trading and rising above 1,30 dollars in the morning. The 17-nation currency also rose vs the yen as Japan’s cabinet approved an economic stimulus package and the country’s industrial production unexpectedly increased. The Stochastic and RSI indicator at the euro chart are still at the overbought level, indicating a downward correction but the Stochastic's two lines have converged and could give markets a selling signal once they cross. The euro last sold at 1.3008 dollars, having breached the 1,30 dollar mark earlier in the day. Supports are seen at 1,2965 dollars, at 1,2950 dollars, at 1,2940 dollars, at 1,29 dollars and at 1,2885 dollars. Resistances are at 1,3010 dollars, at 1,3020 dollars and at 1,3040 dollars.
• Euro zone unemployment rate October 11,7%. Forecast: 11,7%; previous month: 11,6%
• Consumer price index (estimate) November +2,2%. Forecast: +2,4%; previous month: +2,5%
• German retail sales October -0,8%. Forecast: +1,2%; previous month: -3,4%.
U.S.
Nymex Access slightly bearish: Oil prices have edged lower in East-Asia and on Globex electronic trading platform this morning after having tested their first resistance lines. ICE futures have already breached their first supports after the Gasoil's first resistance remained strong, while the WTI crude still trades near its high. The traded volume is about on average. Market players will eye the performance of stock and forex markets today and a string of European and US economic indicators.
Survey of US natural gas storage volumes: for the week till November 23: -8,0 bcf (billion cubic feet) vs the previous week.
Stock reports:
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%.
DOEs: +0.3; distillates -0.8; gaoline +3.9 million barrels vs previous week with refinery runs +0.7%.
Houston (ex-wharf indications 30-11)
380cst $601
180cst $675
MGO $1000
New Orleans (ex-wharf indications 30-11)
380cst $611
180cst $656
MGO $1005
Singapore (correct as of 1430hrs LT - delivered indications)
WTI has now adopted a the beginnings of a recorrection +$0.98. Paper is now turning for Dec 180cst +$0.30 and for 380cst +$1.30 and MGO +$1.30, Jan contracts were trading with 180cst +$0.30, 380st +$2.55 and MGO +$1.30. The cargo market is yet to react having only just adopted paper's drops with 180cst -$9.61, 380cst -$9.13 and MGO -$0.15.
The Singapore markets plummeted app. $9.0 during the morning Platts window. The delivered bunker premiums remained around +$3.0 above cargo prices as the lower outright prices attracted some demands. There were no significant changes to the market fundamentals as strong supply coupled with relatively soft demands. Bunker fuel oil swaps gained app. $5/mt at the front of the forward curve both for Rotterdam and Singapore papers.
High premiums for prompt deliveries.
380 cst $600
180 cst $610
MDO $935
Fujairah (delivered indications 30-11)
380cst $605
180cst $625
MGO $1020
ARA (Amsterdam - Rotterdam - Antwerp)
Rotterdam continued with slow demand today which is not a bad thing with some difficulties with bunker deliveries due to ongoing delays some loading installations, Antwerp continued to run low of high sulfur fuel oil due to shortages of blending components, sources said. Avails in Rotterdam are not much better either [in terms of HSFO availability], some are not quoting until December 5.
Indications for delivered bunkers:
380cst : $ 586
(1.0 %) :$ 610
180cst: $ 619
(1.0 %):$ 643
MGO 0.1%S: $ 935
