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The price of crude oil was moving lower Friday morning as traders were concerned over demand growth after a setback in U.S. fiscal cliff negotiations. Light Sweet Crude Oil (WTI) futures for February delivery, lost $0.97 to $89.16 a barrel. Yesterday, oil gained nearly 2 percent to settle above the $90-mark for the first time in two months even as investors continued to monitor the U.S. budget talks to avert a fiscal cliff that was caught in uncertainty with both sides refusing to budge. Nonetheless, House Speaker John Boehner expressed optimism of closing a deal with President Barack Obama but demanded the Senate vote on his alternate Plan B tax bill.

After oil futures traded up in the first half of the week, they consolidated at a high level Thursday morning, now waiting for news on U.S budget talks and possible advances. The euro continued its rollercoaster ride on Thursday, favouring oil futures' upward movement with a strong tendency. Especially G.Oil at ICE and Heating Oil at NYMEX proved stronger than crude in this phase thanks to winter demand. By breaching first resistances, some stop-loss buying orders sped up distillates upward reaction while Brent failed at the 110.60 dollars resistance in the end and WTI ran out of steam near the 90.50 dollars mark. U.S. economic data were generally better than expected but could not provide decisive bullish signals at the oil market. Now everyone is just waiting for U.S. politicians to find agreement in their budget debacle. Last night, they head for confrontation again and now a resolution to the imminent fiscal cliff seems further away than ever. Ultimately, cold temperature forecasts for the USA and economic data had a supportive effect. The budget deadlock in the USA, however, has been paralyzing trade and prevented any movement in either direction. Thus prices at ICE and NYMEX consolidated at a high level and closed with a small plus. Friday morning, trade is dominated by profit taking.

ICE G.Oil contract for January delivery settled at 941.25 dollars on Monday. This was 4.75 dollars above Monday's settlement. With some 50,400 deals the traded volume was about average.

With the lines crossing, the stochastic oscillator at WTI and Brent gives off first selling signals. At G.Oil the lines are already converging but a selling signal is missing at the moment. The RSI could fall below the 70% line for WTI and Brent and thus trigger a bearish signal see also technical analysis. The market, however, remains overbought, reinforcing technical reactions if selling pressure is to increase when fundamental and/or techncial signals were given. A lot depends on the U.S budget negotiations. If agreement is still not in sight, it could lead to profit-taking from a technical perspective.

U.S.

Nymex Access softer: As market participants were disappointed due to the budget deadlock in U.S. politics, risk-taking has declined. Trading interest at NYMEX is clearly above average at this time of day. Traders seem to increasingly cut their risk positions and are preparing for Christmas holidays. Market participants are waiting for the European market to open, for the upcoming economic data and for a possible turn in U.S. budget talks.

Houston (ex-wharf indications 20-12)
380cst $618
180cst $668
MGO $1011
New Orleans (ex-wharf indications 20-12)
380cst $632
180cst $669
MGO $1005

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

High premiums for prompt deliveries.
380 cst $606
180 cst $616
MDO $935

ARA (Amsterdam - Rotterdam - Antwerp)

Northwest European bunker values firmed Wednesday on stronger FOB Rotterdam barges and crude oil prices,with support coming from the market’s optimism surrounding the potential ‘Fiscal Cliff’ situation in the US. Some bunker sources reported busy trading activity in Hamburg, Gothenburg and Great Belt. However, a few bunker sources indicated weak liquidity levels. Buyers have now met their requirments for the rest of the month, or hoping that the market will finally drop. Most the ports in NWE experienced difficulties with prompt deliveries due to existing or expected barge tightness. Some bunker suppliers noted that loading terminals were expected to operate for only few days due to holidays and had restricted fuel volumes on the loading side as well, sources said. Rotterdam continued to experience difficulties with low sulfur fuel oil availabilities.

Indications for delivered bunkers:
380cst : $ 582
(1.0 %) :$ 612
180cst: $ 612
(1.0 %):$ 642
MGO 0.1%S: $ 935