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Technical indicators: neutral

Oil futures edged down during morning trade. To compensate for production losses caused by the ongoing uproars in Lybia, the IEA decided to release strategic oil reserves of 60 million barrels. Germany will also contribute some part of its reserves to this measure. This considered, oil prices slid on Thursday. Worldwide, about 4.1 billion barrels are stored in tanks, of which the states provide 1.6 billion barrels for cases of emergency. This amount would be sufficient to keep oil importing countries supplied for 146 days without new deliveries.

As expected, oil futures started slightly lower at ICE and NYMEX and edged down during early morning trade Yesterday. Wednesday's price increases had already triggered some profit taking at night. On Thursday, the stronger dollar added to these downward corrections until afternoon. This decline accelerated on the IEA's announcement to release about 60 mln. barrels of strategic oil reserves in July. In no time several supports have been breached increasing technical sales pressure. Speculation and a slightly retreating dollar during afternoon trade, however, led to some upward correction. Nevertheless, the complex settled significantly lower.

ICE Gasoil contract for July delivery settled at 889.00 dollars on Thursday. This was 37.50 dollars below Wednesday's settlement. With some 94,600 contracts, the traded volume was above average.

Despite Thursday's massive losses, the stochastic indicator for Gasoil, Brent and WTI is seen as slightly bullish. The stochasic indicator however is opposed by breached supports, making way for some downward potential. Analysts expect a consolidation ahead of the weekend, which means oil prices will neither breach important resistance lines, nor supports. The first support for the WTI crude is seen at 91.00 dollars, the first resistance at 93.35 dollars. Brent's first resistance is seen at 110.80 dollars, its first support is at 105.70 dollars.

U.S.

Nymex Access gaining. Oil futures remain mostly unchanged and trade within a tight lateral range during electronic morning trading. Profit taking related to short positions might support prices today, whereas fundamentals rather have a restrictive effect. The exchanged volume at NXMEX is on average. Investors are waiting for the opening of the European markets, as well as on new momentum by the foreign exchange market and US economic data to be published in the afternoon.

Houston (ex-wharf indications 23-6)

380 cst $633
180 cst $662
MDO $973

Very tight avails for 180 cst

New Orleans (ex wharf indications 23-6)

380 cst $635
180 cst $664
MDO $976

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

Crude is gaining bearish momentum, losing with WTI -$2.19. Singapore paper is also back on its bearish track, losing with -$17.75 for 180 cst and -$16.95 for 380 cst for Jul, and for Aug 180 cst -$17.80 and 380cst -$17.00 with MGO Jul contracts at -$4.85 and for Aug at -$4.85. The cargo market is ignoring the losses, gaining marginally with 180cst +$0.57, 380cst +$0.06 and MGO +$0.53.

The Singapore market seemed to lack direction, trading unchanged from previous day during the Platts window yesterday. The bunker differential rose slightly to $9.00-10.00 above cargo prices, supported by the relative strength of the paper market. Onshore fuel oil stocks are up with recent western arbitrage cargo. This morning both markets are trading slightly higher.

High premiums for prompt deliveries.

380 cst $637
180 cst $649
MDO $890

Fujairah (delivered indications 24-6)

380cst: $635
180cst: $667
MGO: $1030

Rotterdam

Indications for delivered bunkers:

380cst :$ 603
(1.0 %) :$ 661
180cst :$ 625
(1.0 %) :$ 687
MGO 0.1%S: $ 895