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Technical indicators: neutral to bearish immediate term / neutral to bullish medium term

Oil prices continue to slip on technical selling. Brent temporarily dropped below 120.00 dollars the first time since the beginning of April, but so far the support could not be breached for good.

The markets lost this morning on profit taking, but did not recover as analysts had expected, but fell through more support lines during NYMEX session in what was a technical sell-off fuelled by S&P's threat to downgrade the US credit rating and the rise of the dollar. The tumble of European and US equity markets deepened investor worries. OPEC's comments about the markets being oversupplied also weighed on prices.

ICE Gasoil contract for May delivery settled at 1,004.75 dollars Monday night. This was 19.75 dollars below Friday's settlement. Volume with some 51,700 deals about on average.

Technical analysts see a short-term technical triangle at the brent chart this morning, the support and resistance line of which (120.65 and 123.50 dollars) will limit the trade margin today. NYMEX crude is trading just above its medium-term support line at 105.90 dollars. The Stochastic indicator is no longer seen bullish but has lost its supportive momentum.The RSI is still in neutral territory. The first support for the WTI crude is seen at 106.50 dollars, the first resistance at 108.60 dollars. The Brent's first resistance is seen at 123.50 dollars, its first support is at 121.00 dollars.

U.S.

Nymex Access losing. Oil futures eased a bit in East Asia and Globex electronic trading this morning, pausing after Monday's losses, as the worsening economic outlook in the U.S. stoked speculation of a decline in oil demand. The traded volume is on average.

Survey of US petroleum inventories due out tonight at 22:30 (API) and Wednesday at 16:30 (DOE): crude oil +0.7; distillates -1.2; gasoline +0.2 million barrels vs previous week.

Houston (ex-wharf indications 18-4)

380 cst $647
180 cst $682
MDO $1043

Very tight avails for 180 cst

New Orleans (ex wharf indications 18-4)

380 cst $649
180 cst $684
MDO $1046

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

Crude is dropping like a stone with WTI -$2.71 Singapore paper is gaining bearish momentum as well with -$14.60 for 180 cst and -$13.80 for 380 cst for May, and for Jun 180 cst -$13.80 and 380cst -$12.75 with MGO May contracts at -$2.16 and for Jun at -$ 2.24 The cargo market is slowing, but not yet turning with 180cst +$0.86, 380cst + $1.57 and MGO +$0.65.

The Singapore fuel oil markets came off by more than $3.5/mt last Friday tracking the weaker crude during the Platts window. The Asian fuel oil crack rebounded on tighter supply in Singapore. The bunker delivered premiums were around $6.0/mt above cargo prices. Bunker fuel swaps were strong as well gaining few dollars along the curve. Forward curve maintains a strongly backwardated structure with 2012 prices trading well below spot and front month figures. Market is trading down this morning pricing in an overnight decline in crude futures.

High premiums for prompt deliveries.

380 cst $663
180 cst $678
MDO $1025

Fujairah (delivered indications 19-4)

380cst: $665
180cst: $690
MGO: $1035

Rotterdam

Yesterday, in the MOC lsfo was traded at usd 704, hsfo between usd 633 and usd 645.50.

Indications for delivered bunkers:

380cst: $631
(1.0%): $708
180cst: $650
(1.0%): $736 (very low avails)
MGO 0.1%S: $1002