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Oil prices slipped this morning on disappointing GDPs throughout the euro zone (German, France, Italy), breaching several supports on their way down. The downturn was retained, however, at Brent’s and WTI’s strong support at 102.15 USD and 93.40 USD, respectively. Adding to this price slump was the bearish API report, expecting U.S. stockpiles to stack up yet again, as well as general demand concerns due to bleak economic indicators in China and in Europe. In light of negative growth figures, oil demand is expected to remain weak and drag on prices. Goldman Sachs pointed out today that the Brent price is likely to skew down until new data show in a month time whether weak figures in China and Europe are just seasonal issues or if the dip runs deeper. Moreover, oversupply of oil, which is partly caused by OPEC’s increased production in face of sluggish demand, is another weighing factor as the IEA as well as OPEC and the EIA have shown in their monthly oil reports. In addition, U.S. crude inventories are expected to reach a new record high again this week, despite higher refinery runs, while demand may remain low, according to the API. If the DoE was to confirm this, it would increase pressure on crude contracts even more.

After having sharply risen during US-trade on Wednesday evening oil futures at ICE and NYMEX had already retreated in Asia yesterday morning and fell through their first supports in the course of the morning. Since the second support lines proved strong at all charts, however, the downward move halted and quotations moderately recovered. The euro, that regained some ground against the dollar profiting from surprisingly good economic data out of the euro zone, bolstered oil markets at that time - as did the persistently positive investor sentiment at stock markets. Despite the negative economic outlook, the DAX climbs more and more to ever new record highs. When US economic data came in largely worse than expected in the afternoon, the dollar ceded more ground against the euro providing new stimulus for market players outside the USA to invest in dollar-denominated oil futures. In addition to this, market players expect that in the face of the weak US data, the Fed will have to go on with the expansive measures that are to support the economy. Some Fed members had implied earlier this week that the US central bank might tighten its monetary policy by the end of this year. As to the oil market, some optimists still hope that demand will take up pace as summer is approaching and the US driving season begins on June 1st. These optimists seize the low price level to increase their long positions. The breach of several resistance lines triggered more technical buying orders that accelerated the rally. Thus oil futures at ICE and NYMEX settled near their highs yesterday.

ICE Gasoil contract for June delivery settled at 871.75 USD on Thursday. This was 25.00 USD above Wednesday's settlement. With some 96,000 deals the traded volume was above average.

After the stochastic indicator had already given a buying signal at the Brent chart, its lines also crossed at the Gasoil and WTI charts yesterday. With these new buying signals, the indicator is bullish at all charts this morning, whereas the RSI is still neutral, see also technical analysis. After the breach of the Brent's key-resistance at 103.80 dollar and the Gasoil's key resistance at 863.50 dollars there is more upward slack. This upside was already largely spent yesterday given the considerable price rally. Technical analysts think that prices will rather consolidate this morning and so we assess the technical constellation as neutral..

U.S.

Nymex neutral: After yesterday's renewed price rally oil futures at ICE and NYMEX traded in a rather narrow range this morning showing a moderately softer tendency. It is generally expected that investors will avoid new long positions ahead of the weekend as the latest rally has not been caused by really fundamental reasons. The traded volume at NYMEX is clearly below average for this time of day. Market players are now closely watching the performance of European markets, new cues from forex trading and some economic data to be released in the USA.

Houston (ex-wharf indications 16-05 )
380cst $692
180cst $645
MGO $966
New Orleans (ex-wharf indications 16-05)
380cst $605
180cst $652
MGO $964

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

Crude is up with +$1.45. The paper market is following, gaining with May 180cst +$4.15 and for 380cst +$4.25, and June contracts with 180cst -$4.15, 380st +$4.25. The cargo market is up, with 180cst +$8.00, and 380cst +$6.68 and MGO +$0.39.

The Singapore fuel oil markets- after falling several days in track- rose more than $7.0 during the morning Platts window yesterday. The latest Singapore heavy residual inventory reported a build of +2.6 mbbl to 22.34 mbbl; a five and half month high. The delivered bunker premiums were seen app. $7.0 above cargo prices. This morning the markets are trading down.

High premiums for prompt deliveries.
380 cst $602
180 cst $609
MGO $875

Fujairah (delivered indications 17-05)

380cst $615
180cst $680
MGO $1015

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $590
(1.0 %) :$ 620
180cst: $ 620
(1.0 %):$ 650
MGO 0.1%S: $ 895