---

Technical indicators: neutral to bullish

During early morning trade, oil prices climbed higher, Brent even breaching its first support. Sentiment throughout the oil market is still tense, as there seems to be no end of the deadlock regarding the American debt talks in sight. Lately, oil prices have plummeted again on the stronger dollar.

A tropical low-pressure area developped in the Carribean yesterday afternoon, which has formed the tropical storm "Don" north of the Yucatan-peninsula. The storm moves north-west making landfall probably between New Orleans and Northern Mexico . Oil companies have evacuated their plants except for the personnel necessary to secure the flow of operations. Meteorologists expect the storm will most probably make landfall at Corpus Christi , Texas , disturbing the production of local refineries.

ICE gasoil for August delivery settled at 974.50 dollars on Wednesday. This was 4.00 dollars below Tuesday's settlement. With some 28,300 contracts, the traded volume was far below average

Trade remained rather thin throughout the complex, as a solution regarding US debt talks still could not be found. Wednesday morning, oil prices were more or less unchanged at ICE and NYMEX, initially, staying within their technical range Only in the course of the afternoon has there been some impetus. Given Tuesday's bearish API data and and retreating figures regarding US durable goods orders, market participants liquidated their last long positions. The builds in crude stocks, forecast by the API , were confirmed by the DOE's data published yesterday at 4.30 pm . This triggered a brief dip of oil prices. In the evening, especially ICE futures fluctuated significantly between their intra-high and low, whereas WTI Crude continued retreating, breaching temporary supports. Eventually, oil futures settled lower at ICE and NYMEX, with the spread between Brent and WTI Crude oil widening again up to over 20.50 dollars.

The stochastic indicator is clearly bearish, whereas it looses its bearish impetus at the ICE, showing a slight tendency to turn. Chart analysts still consider the situation neutral but, given the indicator's differing tendencies, also see some potential for the spread between Brent and WTI Crude to keep rising. Although WTI Crude started for a downward correction yesterday, the medium term tendency sideways is still intact at ICE and at NYMEX, limiting the range of oil futures. The first support for the WTI crude is seen at 96.50 dollars, its first resistance at 98.50 dollars. The Brent's first resistance is seen at 118.00 dollars, its first support is at 116.50 dollars.

U.S.

Nymex Access gaining: Oil futures rose slightly during electronic morning trade. According to investors, this is also due to the tropical storm "Don", which caused some liquidations of short positions. The volume traded at NYMEX is on average. Market participants look ahead to the opening of the European markets, news regarding the US debt crisis and the US employment data to be published in the afternoon.

APIs: crude oil -5.2; distillates +1.1; gasoline +2.0 million barrels vs previous week. Refinery utilization +2.0%

DOEs: crude oil -3.7; distillates +3.4; gasoline +0.8 million barrels vs previous week. Refinery utilization +2.3%

Forecasts: Crude oil -1.2; distillates +0.8; gasoline +/- 0.0 million barrels vs previous week.

Houston (ex-wharf indications 27-7)

380 cst $658
180 cst $688
MDO $1017

New Orleans (ex wharf indications 27-7)

380 cst $660
180 cst $698
MDO $1020

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

Crude is gaining bearish momentum with WTI -$1.30. Singapore paper is cautiously reacting to the bearishness with -$1.30 for 180cst and -$0.55 for 380cst for Aug, and for Sep 180 cst -$1.25 and -$0.55 for 180cst with MGO Aug contracts at -$0.20 and for Sep at -$0.20. The cargo market is only starting to turn with 180cst -$0.38, 380cst -$0.19 and MGO -$0.33.

The Singapore fuel oil markets rose by flat to +$2.5 during the Platts window yesterday. There was not much big changes to the fundamentals as the high outright prices have softened demand. The delivered premiums inched up marginally at around $6.0 above cargo prices yesterday. Bunker swaps were again slightly stronger in the front compared to the back of the curve. August papers gained a little yesterday both inj Singapore and Rotterdam while 2012 papers lost few dollars. As a result 2012 papers remained somehow attractive compared to the spot prices and front month papers. .

High premiums for prompt deliveries.

380 cst $678
180 cst $689
MDO $972

Fujairah (delivered indications 28-7)

380 cst $694
180 cst $725
MDO $1085

Rotterdam

Yesterday in the MOC hsfo was traded between 657-660 usd and lsfo between 685-694 usd.

Indications for delivered bunkers:

380cst : $ 665
(1.0 %) :$ 701
180cst: $ 688
(1.0 %):$ 727
MGO 0.1%S: $ 984