---

Crude oil prices gained in early Asia this morning after a sharp drop in industry estimates of U.S. stocks, but a fall in gasoline inventories as well ahead of the summer driving season.

Oil futures at ICE and NYMEX were especially influenced by forex trading and increased due to the weak US dollar or rather due to the strong euro. In dollar-negotiated oil futures got less expensive for traders outside the United States due to the weak US currency. Therefore, traders engaged in long positions again and oil futures also increased following the euro-dollar parity. Analysts at Goldman Sachs were of the same opinion as many market players yesterday: the market situation stays bearish in general due to the existing oversupply and it's ready for a correction movement. Saudi Arabia announced a production level of about 10.3 mbpd and the Iraq announced record exports in June. The euro-dollar parity lost momentum in the afternoon and oil futures eased again after having reached their resistances at 606.50 USD Gasoil, 66.50 USD Brent and 60.55 USD WTI. Oil futures considerably increased again in late trading when the OPEC released its monthly report. This report is to be interpreted as bullish as the EIA's monthly report which was released just after the OPEC report. Therefore, oil futures breached their so far strong resistances. The API US oil inventory data is also to be interpreted as bullish due to increases in stocks of all categories. Oil futures finally settled higher near fresh highs on Tuesday evening.

ICE Gasoil contract for June delivery settled at 607.25 USD on Tuesday, this is +18.00 USD above Monday's settlement. With some 136,200 deals the traded volume (front month) was far above average.

The stochastic indicator's lines sustainably crossed this morning at ICE and NYMEX triggering fresh buying signals. The 21 day moving average was a strong support at ICE. Oil futures breached the 7 day moving average from bottom to top due to their upward movement creating fresh upward margins. We consider the technical constellation as neutral to bullish this morning due to the additional buying signals of the stochastic indicator and due to the fact that Brent and Gasoil didn't surpass their Tuesday's highs so far.

U.S.

Nymex below avarage: Oil futures at ICE and NYMEX consolidate on a high level this morning waiting for fresh signals. The traded volume at NYMEX is slightly above average at this time of the day. Market players are waiting for the European financial and the forex markets to open, for the IEA monthly report and for economic indicators that are on the agenda today. They are also focusing on the official US oil inventory data as per DOE which is to be released this afternoon at 4.30 pm.

Forecast: Crude oil -0.5; Distillates +0.5; Gasoline +0.4 million barrels vs previous week.
API: Crude oil -2.0; Distillates -2.5; Gasoline -1.6 million barrels vs previous week.

Houston (ex-wharf indications 13-5)
380cst $351
180cst $468
MGO $656

New Orleans (ex-wharf indications 13-5)
380cst $360
180cst $416
MGO $631

Singapore (delivered indications 13-5)

WTI is gaining with +$1.85. Singapore paper is gaining with +$8.25 for 180cst with +$8.25 for 380cst for May, and for Jun 180 cst +$7.75 and 380cst with +$8.00 with MGO contracts may gaining with +$2.18 and in Jun with +$2.20. The cargo market is bullish with 180cst +$1.25, 380cst bearish with -$0.86 and MGO with +$0.39.

380cst $381
180cst $400
MGO $596

Fujairah (delivered indications 13-5)

380cst $387
180cst $404
MGO $733

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $362
MGO 0.1%S: $602