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Given the unexpected bottlenecks regarding the Seaway pipeline, refineries in the south of the USA have difficulties to draw from WTI stocks in the heartlands. Accordingly, refineries demand less WTI crude. At NYMEX, investors thus took profits from WTI long positions and cut their spread bets yesterday evening. Recently, particularly stock markets have had a considerable impact on oil markets, given the lack of fundamental news and economic indicators. This is likely to change today. Along with the important preliminary data on the purchasing manager indices, the DOE will publish its data on US oil inventories at 5 p.m.. Volatility might also rise against the backdrop of the bottlenecks regarding the Seaway pipeline. Since new clues from the technical and the fundamental situation were lacking, oil futures remained within their upward trend channels on Wednesday consolidating on a high level. In the course of the day, ICE Gasoil and Brent have tested their supports but the marks at 112.00 dollars resp. 965.00 dollars remained strong, limiting the slack for profit taking.

The quarterly US business reports that have come out mostly positive up to now supported equities and so more important indices in Europe and the USA renewedly marked considerable gains yesterday. Since there were no important economic indicators on the agenda yesterday, investors at ICE and NYMEX kept track of the development at stock markets that are often seen as indicators as well. In late-afternoon trade, this had a bullish impact on oil prices, which were all slightly higher. Brent even breached several resistance lines. Since market players expected bearish data on US crude oil stocks (API), the WTI traded on a lower level. Late in the evening, there was a sharp counterreaction, due to which the WTI sharply dropped while Brent and product futures at ICE and NYMEX remained steady. Investors said, this reaction had been caused by reports saying the Seaway pipeline had seen unexpected shortages that led to a more than 50%-cut in the transporting capacity of the pipeline. As this limited the US refineries' access to the abundant WTI stocks in the heartlands, the US crude oil sort marked a decline of about 1.5%. As a result, the spread between the Brent and the WTI widened to 17.20 dollars.

ICE Gasoil contract for February delivery settled at 970.75 dollars on Wednesday. This was 1.00 dollar above Tuesday's settlement. With some 64,200 deals the traded volume was about average.

The WTI's sharp decline yesterday evening has led to new selling signals from the RSI and the stochastic indicator. Even though the indicators point to a continuation of the decline, we expect their impact to be limited, as the reaction on the reports regarding the Seaway pipeline are probably skewing the picture. Moreover, the indicators are still neutral at Brent and Gasoil charts and the up trends are still intact. Therefore, we still consider the technical situation as neutral as of now, at least until there are also selling signals at ICE charts.

U.S.

Nymex slightly bullish: Along with Asian stock markets (Nikkei 225) oil futures at ICE and NYMEX initially rose this morning. Meanwhile they have slightly retreated as stock markets in Europe have opened with some losses. Trading interest at NYMEX is clearly above average for this time of day. Market participants are waiting for the further development at European stock market and for signals from the forex market. They will also keep an eye on the economic data that are to be released today.

API: crude oil 3.2; distillates +1.3;gasoline -1.6 million barrels vs previous week.
DOE: due out tonight.
Survey: crude oil +2.3; distillates -0.3; gasoline +1.3 million barrels vs previous week.

Houston (ex-wharf indications 23-01)
380cst $623
180cst $703
MGO $1020

New Orleans (ex-wharf indications 23-01)
380cst $641
180cst $681
MGO $1025

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

The Singapore fuel oil market prices dropped between -$5.0 to -$1.5 during the morning Platts window yesterday. Market fundamentals remain weak as more incoming cargoes are expected. The February arbitrage estimates are around 3.8 to 4.0 million mt. The delivered bunker premiums were around $5.75-7.50 above cargo prices. This morning markets are trading slightly higher.

High premiums for prompt deliveries.
380 cst $632
180 cst $634
MDO $950

ARA (Amsterdam - Rotterdam - Antwerp)

There were a few suppliers who were unable to supply for prompt deliveries due to busy schedules. The port of Rotterdam and Antwerp are experiencing difficulties with LSFO for prompt deliveries due to operational delays. Due to the tightness of LSFO in Antwerp the premiums are expected to be higher.

Indications for delivered bunkers:
380cst : $ 618
(1.0 %) :$ 652
180cst: $ 647
(1.0 %):$ 681
MGO 0.1%S: $ 965