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Technical indicators: bearish immediate term / bullish medium term

Oil prices collapse in electronic trading this afternoon as market participants got rid of some of their long positions ahead of ECB meeting and US jobs data, WTI crude fell through its long-term support line and a flood of technical selling orders were triggered, as analysts had forecast. The recovering dollar and sliding European equity markets also weighed on the prices.

Yesterday, oil prices in were in a narrow lateral range in electronic trading in London and New York, edging higher at midday, supported by the decline of the dollar but without enough momentum to breach resistance lines. The weak performance of Wall Street after the release of disappointing US indicators weighed on prices later in the day. A lower-than-forecast expansion in U.S. service industries and less hiring by private companies in April signal that the economic recovery is slower than expected. The price decline was accelerated after the release of the DOE data showing that crude stockpiles climbed to the highest since October. The unexpected draw in gasoline stocks that supported fuel prices later in the session, could not halt the slide of the crude and gasoil futures. Several support lines were breached and more and more technical selling orders triggered. All contracts settled lower.

ICE Gasoil contract for May delivery settled at 998.25 dollars Wednesday night. This was 20.75 dollars below Wednesday's settlement. Volume with some 47,500 deals on average.

The Stochastic indicator at the brent, the WTI and the gasoil chart is clearly bearish this morning but no more overbought, while the RSI has returned to neutral territory between the 70.00 and 30.00 line on all charts. Upward trendchannels are still intact, but there is still room for a downward correction. Technical analysts expect prices to stay rangebound ahead of the release of the DOE data later today. The first support for the WTI crude is seen at 110.20 dollars, the first resistance at 111.65 dollars. The Brent's first resistance is seen at 123.45 dollars, its first support is at 121.70 dollars.

U.S.

Nymex Access gaining. Oil futures futures recovered in East Asia and Globex electronic trading this morning, the brent clawing back above 121.00 dollars for a barrel as the dollar weakens and WTI support at 108.40 dollars still proves solid. The traded volume is slightly below average.

APIs: crude oil +3.2; distillates -1.5; gasoline +0.7 million barrels vs previous week. Refinery utilization +0.6%

DOEs: crude oil +3.4; distillates -1.4; gasoline -1.0 million barrels vs previous week. Refinery utilization +0.1%

Forecasts: crude oil +1.9; distillates +0.8; gasoline +0.3 million barrels vs previous week. Refinery utilization +0.2%

Houston (ex-wharf indications 4-5)

380 cst $657
180 cst $691
MDO $1028

Very tight avails for 180 cst

New Orleans (ex wharf indications 4-5)

380 cst $659
180 cst $694
MDO $1032

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

Crude is losing still with WTI -$2.11 Singapore paper is reflecting the bearish sentiment with -$7.02 for 180 cst and -$6.51 for 380 cst for May, and for Jun 180 cst -$6.39 and 380cst -$6.50 with MGO May contracts at -$1.69 and for Jun at -$1.68 The cargo market is looking for direction still with 180cst +$2.74, 380cst +$2.13 and MGO -$1.39.

The Singapore fuel oil market extended its gain more than $2.00 yesterday during the Platts window. The window saw strong buying particularly from Brightoil which strengthen the Asian fuel oil cracks. The bunker delivered premiums hovered around $5.50 above cargo prices yesterday. Bunker fuel swaps lost $5.00-8.50/mt along the curve both in Rotterdam and Singapore with losses being more pronounced in the backend of the curve for both papers. Forward curve remains backwardated in both markets with Singapore Cal12 swaps offered at app. $30.00/mt discount versus spot prices (a bit more than $20.00/mt discount in Rotterdam). This morning both markets are traded lower.

High premiums for prompt deliveries.

380 cst $676
180 cst $687
MDO $1022

Fujairah (delivered indications 5-5)

380cst: $672
180cst: $700
MGO: $1035

Rotterdam

Yesterday in the MOC hsfo between 644-643 usd.

Indications for delivered bunkers:

380cst: $649
(1.0%): $698
180cst: $671
(1.0%): $714 (very low avails)
MGO 0.1%S: $1018