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WTI oil futures were lower this morning as investors awaited the release of weekly supply data out of the U.S. later in the session to gauge the strength of oil demand from the world’s largest consumer.

After having failed to breach their first resistances on Tuesday morning, oil futures at ICE and NYMEX declined. Gasoil dropped down to Monday's low where losses were limited, however. In the course of the day, quotations regained ground testing their resistances. At first, they were slightly buoyed by news out of Ukraine. If the law granting the eastern regions of Ukraine a special status, which was passed by the parliament yesterday, should bring lasting peace to the region and ease the tensions between Russia and the West, existing sanctions might be scaled back. These sanctions are currently still having a negative impact on economic growth. In the early afternoon, futures at ICE thus surpassed important technical resistances that had limited their steep downtrends. This triggered even more technical buying orders, the more so as the stochastic indicator eventually provided buying signals at the Brent and Gasoil charts. Market fundamentals added to momentum. The OPEC's secretary general Mohamed El-Badri said that the cartel might cut its output from November. In Libya, the production at the largest oil field was reduced. At 10.30 p.m. last night, the API released its data on US oil inventories. This data didn't provide any clear cues, however. Oil futures thus consolidated on a high level in late trade settling near their highs.

ICE Gasoil contract for October delivery settled at 834.75 USD on Tuesday, this is 3.25 USD above Monday's settlement. With some 55,900 deals the traded volume (front month) was about on average.

During the rise oil futures marked early Tuesday afternoon several short-term resistances were breached generating further upward potential. In addition to this, the lines of the stochastic indicator at the Brent and the Gasoil chart crossed giving a buying signal that accelerated the rise, The indicator is still bullish this morning, pointing to more tests of the upside even though the buying signal had already been generated yesterday. The superordinate downtrends are still intact but there is some upward slack left within this trends. Given the buying signal the stochastic indicator gave on Tuesday, we assess the technical constellation as slightly bullish this morning. Only if the RSI sustainably surpasses 30% would there be additional buying cues.

U.S.

Nymex on avarage: After yesterday's gains oil futures hold steady in electronic trading this morning. Despite having taken a short breather overnight, prices regained some ground in the early morning. The traded volume at NYMEX is clearly above average for this time of day. Investors will eye the development at stock and forex markets today as well as the release of the DOE's report on U.S. oil inventories at 4.30 p.m this afternoon. They will also closely watch the situation in the Ukraine, Iraq and Libya and today's economic indicators.

Forecasts: Crude oil -1.5; Distillates +0.8; Gasoline -0.4 million barrels vs previous week.
API: Crude oil +3.3; Distillates +1.0; Gasoline -1.2 million barrels vs previous week.

Houston (ex-wharf indications 17-9)
380cst $560
180cst $666
MGO $942

New Orleans (ex-wharf indications 17-9)
380cst $565
180cst $655
MGO $933

Singapore (delivered indications 17-9)

WTI is gaining with +$1.66 Singapore paper is up with +$5.25 for 180cst with +$5.25 for 380cst for Oct, and for Nov 180 cst +$5.25 and 380cst with +$5.55 with MGO contracts Oct losing with +$0.94 and in Nov with +$0.96. The cargo market is losing with 180cst -$1.73, 380cst with -$2.34 and MGO gaining with -$0.04.

The Singapore fuel oil prices fell more than -$10.0 during the Asian Platts window yesterday tracking a weaker crude. The delivered bunker premiums rose to around +$12.0 above cargo prices on stronger demand and sellers’ reluctance to sell lower.

380cst $567
180cst $580
MGO $825

Fujairah (delivered indications 17-9)

380cst $595
180cst $632
MGO $982

ARA (Amsterdam - Rotterdam - Antwerp)

Please be advised we have decided to dispense with 180cst RME180 indications either for HS or LS as part of our daily report for Rotterdam to clients. The reason being prices are so dependent on volume and dates that putting a figure to it is highly counter-productive and serves only to give false expectations to the customer. Avails are so limited these days and also premiums are charged for smaller quantities (due to the size of the tank required to be reserved for the blend) that it can really effect prices.

Indications for delivered bunkers:
380cst : $545
(1.0 %) : $557
MGO 0.1%S: $812