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The price of oil hovered below $87 a barrel Monday as uncertainty over a deal on the U.S. budget overshadowed expectations of economic stimulus in Japan and China. By early afternoon in Europe, benchmark oil for January delivery was down 7 cents to $86.66 a barrel in electronic trading on the New York Mercantile Exchange. The contract ended up 84 cents Friday at $86.73. In London, Brent crude was down 36 cents at $107.82 on the ICE Futures exchange. Oil prices were kept in check by the lack of agreement in Washington on the U.S. budget, as concerns grew that tax increases and spending cuts that will take effect next year if no deal is reached will hinder economic growth and demand for crude.

Oil futures started strong on Friday and were boosted by the Chinese HSBC PMI, which showed, for the second time in a row, that the Chinese economy is expanding and announced further growth. Later the PMIs of Europe were released but turned out mixed for Germany and the EU and thus could not provide decisive momentum. Trade remained rather technical afterwards and it seemed as if the resistances at 86.95 dollars WTI and at 921.75 dollar G.Oil could not be breached sustainably. WTI dropped back to its day's low at 86.10 dollars in the early afternoon. As far as the U.S. budget talks are concerned, there is still no progress and thus this issue is still weighing on prices due to the possible implications for the world economy. But thankfully, the better than expected U.S. economic figures supported prices in the afternoon. Refinery runs, industrial production and the preview of the manufacturing PMI were all satisfying. Thus oil futures tested their upward potential in late trading and G.Oil could breach its resistance at 921.75 dollars. WTI could at least rise to its high from the previous day and closed at this level. Brent front month contract expired on Friday and its resistances and supports did not play as big a role as usual. ICE Gasoil contract for January delivery settled at 922.75 dollars on Friday. This was 2.75 dollars below Thursday's settlement. With some 62,000 deals the traded volume was above average.

The Stochastic oscilator is still slightly bullish at ICE and for WTI. But since both lines are already converging, the technical indicator loses its influence. The RSI has crossed the 30%-line for WTI and G.Oil and is thus rather bullish, too. Technical analysts take a rather bullish position this morning since buying signals are still from last week and trading interest may be declining until fundamental news will gain more importance in the course of the week.

U.S.

Nymex Access neutral: After Friday's price rally, traders are hesitant this morning. Thus prices consolidated unchanged at a high level. The strong euro as well as profits from Asian stocks are indicative for upside tests but not for profit-taking. Traders are waiting for the European market to open and for the euro's development. There are few events on our economic calender today to give direction. Merely the U.S. Empire State Index is on the agenda in the afternoon.

Houston (ex-wharf indications 14-12)

380cst $611
180cst $668
MGO $995

New Orleans (ex-wharf indications 14-12)

380cst $626
180cst $671
MGO $1010

Singapore (correct as of 1430hrs LT - delivered indications)

Crude with WTI -$0.04 Singapore paper is bullish with +$2.00 for 180cst and -$2.40 for 380cst for Nov, and for Dec,180 cst +$2.00 and 380cst +$2.40. With MGO contracts Nov +$0.22 and Dec +$0.25. The cargo market is stable with 180 cst +$0.87 380cst -$0.53 and MGO +$0.75.

High premiums for prompt deliveries.
380 cst $604
180 cst $614
MDO $921

Fujairah (delivered indications 17-12)

380cst $605
180cst $640
MGO $1020

ARA (Amsterdam - Rotterdam - Antwerp)

LSFO loadings are taken up to 4 days in Antwerp. HSFO there are no spot-avails. Beside the existing contracts of the suppliers, there are no load possibilities in Antwerp or Flushing. Both influences the Rotterdam hub with regards to the loading capacity. A lot of waitingtime is reported in some of the refineries or storages. Those where waitingtime is taken to the minimum, high premiums are noted. Therefore, for prompt enquiries, a bigger premium is to be expected.

Indications for delivered bunkers:
380cst : $ 575
(1.0 %) :$ 605
180cst: $ 605
(1.0 %):$ 635
MGO 0.1%S: $ 920