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Brent oil futures tumbled to the lowest level in more than four years this morning, as mounting concerns over the global economic outlook weighed.

Oil futures declined Monday night after Saudi Arabia had cut its price for December deliveries to the USA. Even though investors could have covered their short positions, oil markets still tended to the downside on Tuesday morning. The break below Monday's lows triggered further downward potential in late morning trade. That is why oil prices in London and New York continued dropping. Several supports were breached before the price drop was thwarted near 82.00 USD Brent and 725.00 USD Gasoil. Saudi Arabia's aggressive pricing caused a change from a backwardation constellation to contango, which is also a bearish signal for market players. The economic data which was released yesterday had no sustainable influence on oil prices which temporarily recovered in the afternoon on short-covering. In the late evening, the API's US oil inventory data was released. The report showed surprising figures but was neither bearish nor bullish. Therefore, prices could hardly recover from their price drop settling with losses near fresh long-term lows.

ICE Gasoil contract for November delivery settled at 726.25 USD on Tuesday, this is 20.25 USD below Monday's settlement. With some 61,000 deals the traded volume (front month) was slightly above average.

WTI's settlement below 80.00 USD generated further technical downside at the beginning of the week. The stochastic indicator at the ICE charts stays slightly bearish this morning while it already lost its influence at the WTI chart. The lines of the indicator are still still pointing downward but are converging again. The RSI entered oversold territory at the Brent and the WTI chart dropping below the 30 line. However, it doesn't give any fresh signals (yet). Even though the stochastic inicator's selling signals should be absorbed by now, its slightly bearish tendency at the Brent and the Gasoil chart still justify a bearish assessment of the technical constellation. Should the lines converge again like they do at the WTI chart the bearish influence would wane.

U.S.

Nymex below avarage: Up to now there is no clear direction to be seen at the oil market. Futures stay at the level of their long-term lows and ICE Gasoil and the oil products at NYMEX are already testing. The traded volume at NYMEX is below average at this time of the day. Market players are waiting for the European financial and the forex markets to open and will eye the situation in the geopolitical hotspots and the economic indicators which are to be released today, as well as the DOE data to be released this afternoon at 4.30 p.m.

Forecast: Crude oil +1.9; Distillates -2.2; Gasoline -1.0 million barrels vs previous week.
API: Crude oil -0.6; Distillates +0.2; Gasoline +0.2 million barrels vs previous week.

Houston (ex-wharf indications 5-11)
380cst $454
180cst $557
MGO $825

New Orleans (ex-wharf indications 5-11)
380cst $460
180cst $519
MGO $839

Singapore (delivered indications 5-11)

WTI is losing with -$1.53 Singapore paper is down with -$4.75 for 180cst with -$5.00 for 380cst for Nov, and for Dec 180 cst -$5.75 and 380cst with -$5.10 with MGO contracts Nov bearish with -$1.47 and in Dec with -$1.45. The cargo market is losing with 180cst -$11.87, 380cst with -$10.30 and MGO with -$1.48.

The Singapore fuel oil prices shredded more than -$10.5 during the Asian Platts window tracking the massive fall in crude values. The delivered bunker premiums rose stronger to app. $9.0 above cargo prices.

380cst $462
180cst $475
MGO $726

Fujairah (delivered indications 5-11)

380cst $473
180cst $525
MGO $925

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $442
(1.0 %) : $452
MGO 0.1%S: $708