Market in Brief

Crude prices started the week on a stronger note. The August WTI futures rose +$1.54 to close at $85.99/bbl and Brent surged up +$2.13 to settle at $100.32/bbl. Crude prices were supported by the Norway oil strike with the threat of a total production shutdown. However, the Norwegian government stepped in at the last minute and the strike was averted. As a result crude prices came off by session’s end. Crude is vulnerable as the underlying economic conditions remain weak. On the other hand support is coming from the Iranian risk. Iran had threaten to close off the strait of Hormuz; a fifth of global crude oil tankers' route after the embargo was enforced recently. The Chinese exports data released today fell below expectations on slowdown in US and Europe consumption while the Chinese oil imports for June fell 14.8% which pressures current crude prices. This morning, crude is trading down.
 

Fueloil Specifics

Bunker fuel prices had strengthened slightly in the beginning of this week. Delivered 380cst product added approx. $2/mt to the price while cargo index gained twice as much. Despite that market mood remains cautious. As demand from Asia remains week and arbitrage largely closed market participants do not expect considerable strength in the near future. Therefore NWE market remained well supplied while demand remains relatively weak. The Singapore fuel oil markets prices were down by more than $10/mt during the Platts window. Market looks pretty weak as cargo premiums had softened. The delivered bunker premiums were at $7.25/mt above cargo prices. Bunker fuel swaps closed with an approx. $3.75 - 4.5/mt gain along the curve. However, both markets are trading slightly lower this morning.
 

Settlement & Indications (mid values)

Economy fundamentals this week

Technical indicators

Energy contracts had largely recovered the last Friday’s losses in the yesterday session. They trade down this morning though within the yesterday range. Brent has the nearby support from MA34 @ 98.3 trying to gather momentum to test targets around MA55 @ 104.1. US crude is supported by its own MA34 @ 84.5 while targets are around July top on close @88/bbl. GO is somehow similar to WTI though they yesterday gains were less significant at this chart. Overall we maintain a positive view, though a degree of weakness might precede the next test of the resistance levels. MA34 has come to play on all charts and it remains to be seen if the level will be able to provide a sufficient support. EUR/USD remains weak lending no support at all to the dollar-denominated energy commodity indices.