Crude prices eased below $108 a barrel in Singapore on Thursday, with Brent crude prices falling more sharply in London, after data showed China’s manufacturing activity continued to contract, weakening sentiment further in a market already reeling from Saudi Arabia’s pledge to keep global oil prices low. US crude prices dropped to a six-week low after data showed crude stockpiles had jumped far more than expected last week due to a surge in imports.
After Monday's and Tuesday's price decline, oil futures at ICE and NYMEX edged slightly up Wednesday morning. The announcements of the Bank of Japan that it would intervene by stepping up its bond buying program in 2013 have bolstered equities and the euro. These gains have also sent oil futures higher making them test first and second resistance lines. This positive effect was only temporary, however. Since the resistances remained strong and the euro retreated around noon, prices saw a successive downward correction. Near their supports at 94.00 dollars (WTI) and 970.00 dollars (Gasoil) prices seemed to consolidate ahead of the release of the DOE's data. Saudi Arabia's official figures regarding output have shown that the kingdom produced some 1.8 mbpd more than demanded. The OPEC's secretary general el-Badri also explained that the market currently did not see any shortages in supply and that demand remained weak. Even ahead of the release of the US oil inventories data, the bearish tendency thus prevailed and was accelerated when the supports that had been stable before have been breached. The massive builds in crude oil stocks published by the DOE have also been bearish, whereas downward potential has been damped by the profit taking markets had seen shortly before, as well as by the surprising draw in product stocks. In all, oil futures have continued to retreat, trading some 3.9% (Brent), resp. 4.4% (WTI) lower than at the opening of the session.
OPEC: Global oil demand is poised to be depressed for the next 18 months while supply levels from OPEC countries are at fairly comfortable levels, the West's energy agency the IEA said. The IEA said it made no significant changes to its global oil demand outlook and forecast demand would grow at a steady rate of around 0.8 million barrels per day (bpd) or 0.9% in both 2012 and 2013. Some analysts said the oil demand outlook would probably be marked down by the IEA in the future.
ICE Gasoil contract for October delivery settled at 958.25 dollars on Wednesday. This was 30.25 dollars below Tuesday's settlement. With some 91,600 contracts the traded volume was far above average.
The stochastic indicator remains slightly bearish this morning, even though the lines of the indicator are already approaching. The RSI has fallen below the line of 30% at the charts of some contracts, pointing to a slightly oversold market. Given the stochastic position, technical analysts still assess the situation as neutral to bearish, however, even though quotations have spent much of their downward potential in the past few days. There was no point in placing positions contrarily to this downward movement, Tony Rosado of Dorado Energy Services explained.
U.S.
Nymex access stable : Oil futures have hardly changed on Globex electronic trading platform this morning. After a renewed correction, oil futures consolidated on a lower level last night and in the early morning. The euro and Asian stock markets are currently retreating again which might raise the selling pressure at ICE in the course of the morning. The traded volume is above average but investors already focus on the November contract, as the WTI contract with October delivery will expire tonight. Market players now look ahead to the development at stock and forex markets as well as a string of economic indicators.
API's: Crude oil +2.4; distillates -1.1; gasoline +0.1 million barrels vs previous week. Refinery utilization +0.1%
DOE's: Crude oil +8.5; distilates -0.3; gasoline -0.4 million barrels vs previous week. Refinery utilization +4.2%
Forecasts: Crude oil -1.1; distillates +0.8; gasoline +0.6 million barrels vs previous week
Houston (ex-wharf indications 19-9)
380cst $651
180cst $704
MGO $1055
New Orleans (ex-wharf indications 19-9)
380cst $648
180cst $701
MGO $1065
Singapore (correct as per 14:30hrs LT-delivered indications)
Crude is dropping with WTI -$4.56. Singapore paper is continuing its decline with -$27.55 for 180cst and -$27.25 for 380cst for Oct, and for Nov 180 cst -$27.95 and 380cst -$27.25 with MGO contracts Oct -$4.38 and Nov -$4.56. The cargo market is bearish with 180cst -$6.47, 380cst -$6.39 and MGO -$0.61.
The Singapore Fuel Oil markets fell more than $6.0 during the morning Platts window yesterday tracking the crude movement. The demand was said to be pretty firm on softening outright prices. The delivered bunker premiums were around $8.0 above cargo prices. Bunker fuel oil swaps posted app.$26/mt losses at the front of the forward curve for Singapore papers. Backend was slightly stronger again, down by app.$23/mt. This morning the market continues trading down.
High premiums for prompt deliveries.
380 cst $640
180 cst $655
MGO $950
ARA (Amsterdam - Rotterdam - Antwerp)
The ARA is well supplied, with some demand picking up, although the on-going maintenance at the Flushing refinery was still affecting high sulphur availability. With short cutter stocks underpinning the markets and a heavy maintenance programme for September with two important North Sea oilfields set for a one month closure. High premiums are charged for prompt enquiries.
