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Crude oil futures dropped to two-month lows in subdued trade this morning, as worries over potential supply disruptions in the Middle East continued to subside.

There was but little upward potential left for at oil markets on Friday morning after Thursday evening's rise. That is why traders renewedly tended to take some profits. The still rather bearish market fundamentals thus outweighed the slightly bullish technical constellation. Even though the IEA's monthly energy report that was released on Friday morning also contained bullish components, forecasting a higher oil demand growth, the report at last confirmed the EIA's and the OPEC's forecasts. These organisations estimate that the demand for OPEC-crude oil will decline in the future indicating a more convenient global supply situation as non-OPEC production is to rise. In Iraq, the semi-autonomous region of Kurdistan was able to increase its output seizing more oil fields near Kirkuk. Meanwhile, there was no news on the negotiations over Iran's nuclear program in Vienna. Eventually, market sentiment didn't significantly change on Friday. Investors still have a bearish view on the current and the future situation of supply. In all, the softer tendency prevailed at oil markets in London and New York and so, oil futures dropped below several supports and Brent even hit a 3-month low.

ICE Gasoil contract for August delivery settled at 884.25 USD on Friday, this is -3.25 USD above Thursday's settlement. With some 69,300 deals the traded volume (front month) was above average.

After the stochastic indicator had given a buying signal last week its lines have converged again. Thus the indicator has turned neutral. Since the RSI will only give a buying signal if it surpasses 30% and the stochastic indicator will only give a new signal if its lines clearly cross, we are currently assessing the technical situation as neutral.

U.S.

Nymex above avarage: Friday afternoon's profit taking was massive causing some short covering this morning. However, there was no significant correction and futures are consolidating on a low level this morning. The traded volume at NYMEX is clearly above average for this time of day. Traders will eye stock and forex markets today monitoring the developments in Iraq, Ukraine, Iran and Libya. They will also wait for news on the nuke talks with Iran and today's economic indicators.

Houston (ex-wharf indications 14-7)
380cst $587
180cst $677
MGO $978

New Orleans (ex-wharf indications 14-7)
380cst $592
180cst $640
MGO $979

Singapore (delivered indications 14-7)

WTI is neutral with x$0.00. Singapore paper is down with -$3.95 for 180cst and -$3.50 for 380cst for Jul, and for Aug 180 cst -$3.00 and 380cst with -$3.25 with MGO contracts being bullish in Jul with -$0.51 and in Aug with -$0.53. The cargo market is bullish with 180cst +$2.22, 380cst with +$3.15 and MGO with +$0.88.

The Singapore fuel oil prices closed Friday seeing another round of gains by +$2.0 to +$3.0 during the Asian Platts window. The Singapore heavy residual inventory report saw a draw of -2.31 mbbl to 20.89 mbbl. The delivered bunker premiums were up slightly, seen at around +$6.0 above cargo prices. The morning Singapore fuel oil values started indicatively stronger with a considerably narrowing of the Asian crack.

380cst $592
180cst $608
MGO $885

Fujairah (delivered indications 14-7)

380cst $609
180cst $637
MGO $985

ARA (Amsterdam - Rotterdam - Antwerp)

380cst : $574
(1.0 %) : $614
180cst: $614
MGO 0.1%S: $855