The Stochastic oscillator is still bearish today but the RSI ticks upward. The 30 line, however is still out of reach and the techncial view remains bearish according to analysts. After profit-taking the past days, a correction seems to be due, not least because G.Oil and Brent are oversold. This indicates that prices may consolidate with a bullish tendency above yesterday's lows. Some short-covering is seen limiting downside before the release of U.S. job market data. Technical analysis will probably be of less importance today and traders will focus on macro-economic data. After the downward movement on Wednesday, futures at ICE and NYMEX consolidated this morning above the first support lines as expected and even hit some resistances. But due to the bearish fundamental and technical constellation, prices were unable to correct upwards and thus futures targeted supports in the afternoon. The soft euro and the strong dollar, which make oil expensive for investors outside the USA, favoured profit-taking. The surprisingly good weekly U.S. unemployment figures as well as the correction of the ECB growth forecast for the EU in 2013 triggered the downward movement of the euro. Instead of the previously estimated 0.5% growth rate, a decline of 0.3% of economic performance is to be expected next year. Stop-loss selling orders were automatically triggered by the breach of support lines and increased downside. With yesterday's low at 910.25 dollars, G.Oil marked a new 4-month low.
ICE Gasoil contract for December delivery settled at 913.50 dollars on Thursday. This was 14.50 dollars below Wednesday's settlement. With some 38.600 deals the traded volume was below average.
Traders eye macro data as indicators for demand growth. Due to the good supply situation and high productivity, prices react to the EU forecast of declining growth in 2013, which could further weaken oil consumption. Repercussions of the bearish DOE report on Wednesday can still be felt. After supply difficulties and hurricane Sandy, refinery utilization has recovered better than expected and almost reached record highs in the Mid-West and Gulf region. Andy Lipow of Lipow Oil Associates assumes that oil inventories remain high and thus further downside can be expected. A Christmas price rally could compromise this development. However, this could also be prevented if Republicans and Democrats come to an agreement in the budget talks, says Torben Kjus of DNB Bank ASA. He also sees a good chance that a U.S. recession and declining demand can be avoided since in the past 10 of 11 years, there has been a price rally with an increase of 10%. But this rally may only be temporary since prices are expected to fall in 2013 compared to 2012.
The common currency could not recover from yesterday’s losses this morning and traded downward in a narrow range; the correction of ECB’s growth forecast for the euro zone is still weighing on the euro. In a calm market with little fundamental news, the bearish technical constellation adds to the pressure on the 17-nation currency. One support has been breached but the strong support at 1.2920 dollars prevents further losses. Investors are waiting for the official U.S. job market statistics, which could also affect the euro-dollar parity. Forecasts saw an unchanged unemployment rate but the number of new employments had decreased from October to November. If the job market figures are as bad as expected, politico-economic measures by the Fed become more likely and would trade down the euro compared to the dollar. The technical analysis still shows a bearish stochastic oscillator after selling signals yesterday afternoon. Currently the euro sells at 1.2920 dollars and hits first supports. Resistances are at 1.1975 dollars, at 1.30 dollars, at 1.3040 dollars and at 1.3085 dollar. Further resistances are at 1.2905 dollars and at 1.2880 dollars.
German economic indicators:
• Industrial production October -2,6%. Forecast: -0,5%; previous month: -1,3%.
Today traders are waiting in suspense for the important U.S. job market data to be released in the afternoon and they hardly take on risk positions in face of low trade volume. After U.S. job market figures and growth forecasts the last two days, today’s report might not be positive. The soft euro, compared to the dollar, as well as strong resistances favour profit-taking. But despite the optimism at European stock markets, losses will be limited.
US economic indicators:
• Unemployment rate November 7,7%. Forecast: 7,9%; previous month: 7,9%.
• Hourly Earnings November +0,2%. Forecast: +0,2%; previous month: ±0,0.
• Average Workweek November 34,4. Forecast: 34,4; previous month: 34,4.
• Nonfarm Payrolls November +146.000. Forecast: +93.000; previous month: +138.000.
U.S.
Nymex Access neutral: Futures are trading sideways in a narrow range after a slight technical correction to yesterday's losses. Sales volume at the electronic NYMEX is slightly below average at this time of day. Traders are waiting for the European markets to open, for signals from forex trading and for the release of a series of economic indicators.
API: Crude oil -2.2; distillates +1.1; gasoline +5.7 million barrels vs previous week.
DOE: Crude oil -2.4; distillates +3.0; gasoline +7.9 million barrels vs previous week.
Forecast: Crude oil -0.4; distillates +1.2; gasoline +2.2 million barrels vs previous week.
Houston (ex-wharf indications 07-12)
380cst $598
180cst $655
MGO $1003
New Orleans (ex-wharf indications 07-12)
380cst $628
180cst $657
MGO $1007
Singapore (correct as of 1430hrs LT - delivered indications)
The Singapore markets dipped more than $2.0 during the morning Platts window yesterday. The latest Singapore heavy residual inventory reported a build of 0.5 mbbl to 23.0 mbbl; rose for the fifth straight week. The delivered bunker premiums were seen at $2.5- 5.0 above cargo prices. Bunker fuel oil swaps lost app.$8/mt at the front and a dollar more at the backend of the forward curve both for Rotterdam and Singapore papers.
High premiums for prompt deliveries.
380 cst $596
180 cst $606
MDO $917
Fujairah (delivered indications 07-12)
380cst $609
180cst $635
MGO $1015
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 at some loading installations, Prompt therefore is problematic easing only as of the 10/11th.
Indications for delivered bunkers:
380cst : $ 578
(1.0 %) :$ 603
180cst: $ 605
(1.0 %):$ 630
MGO 0.1%S: $ 910
