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Crude supplies dropped by 11.1 million barrels, or 3 percent, to 359.9 million barrels, which is 9.2 percent above year-ago levels, the Energy Department's Energy Information Administration said in its weekly report. Analysts expected a drop of 1 million barrels for the week ended Dec. 28, according to Platts, the energy information arm of McGraw-Hill Cos.Gasoline supplies grew by 2.6 million barrels, or 1.2 percent, to 225.7 million barrels. That's 2.5 percent higher than year-ago levels. Analysts expected gasoline supplies to rise by 2.3 million barrels.Demand for gasoline over the four weeks ended Dec. 28 was 2.3 percent lower than a year earlier, averaging 8.6 million barrels a day.U.S. refineries ran at 90.4 percent of total capacity on average, up 0.1 percentage point from the prior week. Analysts expected capacity to rise to 90.75 percent. Supplies of distillate fuel, which include diesel and heating oil, increased by 4.6 million barrels to 124 million barrels. Analysts expected distillate stocks to grow by 1.6 million barrels. Benchmark crude futures fell 23 cents to $92.69 a barrel in New York.

Oil futures largely traded within their technical range Wednesday morning. Economic indicators and fluctuations at the stock market and with the euro did not really have an effect. Market participants had waited for the DoE data to be released in the afternoon and were cautious most of the day. Only when the inventory data was released did the market move and oil prices traded down as the figures were clearly bearish. However, it was not enough for Brent and WTI to breach the key supports of their trend channels. Thus they bounced off at 111.10 dollars Brent and 82.80 dollars WTI and slightly corrected upwards. Compared to others, distillate futures stayed relatively strong at ICE and NYMEX. Analysts attribute this to the fact that G.Oil contract expires today and traders shifted their positions. In addition, the inventory data comprised a bullish factor as stockpiles had declined in U.S. states at the East Coast compared to the rest of the country.

ICE Gasoil contract for January delivery settled at 948.50 dollars on Wednesday. This was 3.25 dollars above Tuesday's settlement. With some 34,400 deals the traded volume was below average. The stochastic oscillator is giving off a selling signal for Brent while the indicator is still neutral for WTI. The technical view is still bullish for G.Oil but is gradually losing its effect. In all, the technical analysis shows that the market is at the oversold level but Brent's and WTI's strong supports limit upward potential, giving rise to a counter-reaction, see also technical analysis. As long as prices stay above these lines, the technical analysis will probably not turn bearish. But below these lines wait numerous selling orders ready to be triggered.

U.S.

Nymex Access bullish: Oil futures slightly trade up in the morning, supported by a strong Asian stock market and positive figures on Chinese trade balance. Trading interest at NYMEX is about average for this time of day. Traders are waiting for the European market to open and for economic data to be released today.

API's: Crude oil +2.4; distillates +5.9; gasoline +7.9 million barrels vs previous week.
DOE's; Crude oil +1.3; distillates +6.8; gasoline +7.4 million barrels vs previous week.
Forecasts: Crude oil +1.6; distillates +1.6; gasoline +1.4 million barrels vs previous week.

Houston (ex-wharf indications 09-01)

380cst $636
180cst $685
MGO $1020

New Orleans (ex-wharf indications 09-01)

380cst $651
180cst $696
MGO $1014

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

WTI is stable still with +$0.41. Paper for Jan are more bullish, gaining with 180cst +$6.50 and for 380cst +$6.50 , Feb contracts are gaining as well with 180cst +$6.00, 380st +$6.70. The cargo market is starting to react to crude and paper with 180cst +$2.48, 380cst +$3.22 and MGO +$0.92.

The Singapore markets rose more than $2.5 during the morning Platts window yesterday. Bunker demand was said to be pretty slow and market is still seeing ample supply as demand lags. The delivered bunker premiums were firmer, between $4.5-6.5 above cargo prices yesterday. This morning the markets are trading higher.

High premiums for prompt deliveries.
380 cst $632
180 cst $637
MDO $945

ARA (Amsterdam - Rotterdam - Antwerp)

In general, there are good stocks of products and availability of barges reported. This is the same for Antwerp and Rotterdam.

Indications for delivered bunkers:
380cst : $ 622
(1.0 %) :$ 655
180cst: $ 652
(1.0 %):$ 685
MGO 0.1%S: $ 960