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Oil prices hover near a seven-month lows this morning on Europe debt crisis worries, and bearish China economy figures.

Oil futures kept trading lower in London and New York Wednesday morning, breaching first short term supports. Retreating equities and the softer euro particularly pressured oil prices, as preparations for Greece's exit from the euro zone are obviously being made. Until the release of US economic data and the DOE's data on US oil inventories, market participants at ICE and NYMEX avoided larger transactions. Economic data came out positive but were unable to support oil futures, as the dollar profited the most from these figures, which prompted some profit taking ahead of the DOE's data. The latter showed renewed builds in crude oil stocks and a weak demand in products and thus put even more pressure on prices. The WTI crude fell below 90 dollars again for the first time in 6.5 months, triggering technical selling. As the euro consolidated slightly below 1.26 dollar, US stocks were able to pare their losses and the expected breakthrough in the nuclear talks with Iran did not occur yesterday evening, the downward potential was limited. The WTI crude climbed back over 90 dollars but still settled with considerable losses.

ICE Gasoil contract for June delivery settled at 903.25 dollars on Wednesday. This was 14.50 dollars below Tuesday's settlement. With some 63,200 contracts the traded volume was little above average.

OPEC: Hopes for a quick diplomatic breakthrough in talks aimed at containing Tehran's nuclear program diminished as Iranians balked at the lack of sanctions relief in a proposal made by global powers, calling the proposal single-sided and unbalanced. Iran indicated it saw an end to impending Western sanctions on Iran's oil trade as necessary for the talks to advance. The U.S. has said Tehran must first take significant steps toward addressing concerns that it seeks nuclear weapons before Washington dials back sanctions.

With its lines crossing, the stochastic indicator for the Brent gives market players a selling signal this morning. For the Gasoil and the WTI the indicator is also bearish, even though the selling signal is not as strong as for the Brent. The WTI crude's drop below 90 dollars yesterday evening has shown, that there is enough downward potential for the contract to fall below this mark again, whereas market players are still waiting for the results of the nuclear talks in Bagdad. In general the technical constellation is slightly bearish, given the stochastic indicator and the persisting down trends. This indicates that oil futures may test their downward potential.

U.S.

Nymex access easing: Oil futures edged lower in Asian trading and on Globex electronic trading platform this morning. After having slightly recovered last night, oil futures slightly retreated this morning. Some losses at Asian stock exchanges weighed on sentiment. Moreover the rather bearish fundamental and technical situation indicates that prices may continue their downward trend. The traded volume is on average. Investors eye stock and forex markets and today's economic indicators.

API's: Crude oil +1.5; distillates -0.2; gasoline -4.5 million barrels vs previous week. Refinery utilization -0.1%
DOE's; Crude oil +0.9; distillates -0.3; gasoline -3.3 million barrels vs previous week. Refinery utilization -0.2%
Forecasts: Crude oil +0.8; distillates +0.1; gasoline +0.1 million barrels vs previous week.

Houston (ex-wharf indications 23-5)

380cst $633
180cst $667
MGO $965

New Orleans (ex-wharf indications 23-5)

380cst $640
180cst $675
MGO $958

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

The Singapore fuel oil markets lost more than $3.5 during the morning window yesterday. Market has been supported by BP and Brightoil who are buying actively. The delivered bunker premiums were firm at around $6.0 above cargo prices. Singapore swaps lost in a range of $11.75-10.75/mt along the forward curve. This morning markets continue trading down.

High premiums for prompt deliveries.

380 cst $635
180 cst $645
MGO $890

Fujairah (delivered indications 24-5)

380cst $666
180cst $688
MGO $1040

ARA (Amsterdam - Rotterdam - Antwerp)

As crude continues to weaken, local bunkerdemand evaporated. Local avails in Rotterdam and Hamburg on hsfo and lsfo are still very tight. Two VLCC's are reported loading soon, heading for Asia.

Rotterdam

Indications for delivered bunkers:

380cst : $ 612
(1.0 %) :$ 655
180cst: $ 635
(1.0 %):$ 675
MGO 0.1%S: $904