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After yesterday’s price slump, oil futures at ICE and NYMEX are trading sideways in a narrow range. Not even the softer euro, which had slipped below its first support after disappointing economic data in the euro zone, could make an impact on the oil market this morning. Market players already concentrate their attention on the ECB’s interest rate decision this afternoon. The Bank of Japan (BoJ) had already announced this morning that it would not change the current base rate but intended to increase expansive measures. If the ECB was to reinforce its lose monetary policy in order to stimulate the economy, it would raise investors’ hopes of demand picking up.

Waiting for the upcoming economic data and the DoE report, oil futures were rangebound during morning trade. On the one hand, the bearish technical constellation weighed on prices while, on the other hand, economic data released in China and the USA the day before supported. However, when the ADP released its job market report and the ISM its non-manufacturing PMI, traders increasingly tended to take some small profits in the early afternoon. Brent and G.Oil breached their first support while WTI held steady. Only at the release of the bearish DoE data did selling pressure on the American crude increase. Consequently, oil futures breached several supports in a row, triggering stop-loss sellings. The price slump continued into the evening, reinforced by the bearish technical view. Thus, all contracts closed at their day’s low, see tickcharts. With -3.2%, Brent marked its lowest level this year while WTI and G.Oil only fell by 2.8% and 2.9%, resepectively.

ICE Gasoil contract for May delivery settled at 912.75 USD on Wednesday. This was 16.75 USD above Tuesday's settlement. With some 41,800 deals the traded volume was below average.

The stochastic oscillator is still bearish for all contracts. In addition, the RSI gave off a selling signals yesterday by breaching the 70%-line. The technical indicators speak in favour of more profit-taking. However, we only assume a moderately bearish stance this morning as yesterday’s hefty downward reaction already used up much of the bearish potential and market player may tend to cover some short positions this morning.

U.S.

Nymex neutral: After yesterday’s price slump due to the bearish DoE report, oil prices are slightly recovering in Asian trading this morning, supported by the stronger Nikkei 225. The traded volume at NYMEX is clearly above average for this time of day. Market players are now closely watching the performance of European markets, new cues from forex trading and today's economic data, with particular focus on the ECB’s interest rate decision.

API's: Crude oil +4.7; distillates -1.9; gaoline -5.0 million barrels vs previous week
DOE's; Crude oil +2.7; distillates -2.3; gasoline -0.6 million barrels vs previous week.
Forecasts: Crude oil +1.9; distillates -0.4; gaoline -0.3 million barrels vs previous week.

Houston (ex-wharf indications 02/04 )
380cst $626
180cst $676
MGO $1024

New Orleans (ex-wharf indications 02-04)
380cst $627
180cst $657
MGO $1026

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

Crude is losing on bearish US news with -$2.35. The paper market is responding, with April 180cst dropping -$18.55 and for 380cst -$18.65, and May contracts with 180cst -$17.75, 380st -$18.00. The cargo market is reacting slowly with 180cst -$5.29, and 380cst -$4.19 and MGO +$0.56.
v The Singapore fuel oil market fell more than $4.0 during the morning Platts window yesterday. Fundamentally, the cargo market remains firm with cargo premium more than $2.0/mt. The delivered bunker premiums were kept between $7.0 to 9.0 above cargo prices yesterday. Bunker fuel oil swaps lost up to $10,50/mt at the front of the forward curve both for Rotterdam and Singapore papers. Backend was slightly stronger with cal 2014 papers assessed app.$6/mt down from previous day. This morning markets continue trading down.

High premiums for prompt deliveries.
380 cst $625
180 cst $627
MGO $910

Fujairah (delivered indications 03-04)

380cst $633
180cst $677
MGO $1025