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The price of crude oil was trading firm Wednesday morning ahead of official inventories data from the Energy Information Administration, due out later during the session. Light Sweet Crude Oil (WTI) futures for March delivery, edged up $0.37 to $97.94 a barrel. Yesterday, oil extended its four-month high to settle higher mainly on supply concerns with the continued geopolitical tensions prevailing in the Middle East, specifically in Algeria and Egypt, which has threatened to disrupt oil outflow. Investors largely ignored some weak consumer confidence data out of the U.S., even as they await the outcome of the Federal Reserve's policy meet due later this week. Tuesday after the market hours, the API said crude oil inventories rose 4.2 million barrels and gasoline stocks added 2.4 million barrels in the week ended January 25. This morning, the U.S. dollar was lingering around its 11-month low versus the euro. Oil futures consolidated within their technical trading range yesterday morning, waiting for fresh signals to give direction. First tests of short-term supports were unsuccessful in the first part of the day. But positive economic data released in the afternoon eventually cleared the way for a bullish market sentiment, also reinforced by the rising stock market and euro. Consequently, WTI breached its first important resistance at 97.00 USD early on, which indicated technical upward potential. When Brent and G.Oil breached its resistances at 113.75 USD and 97.00 USD respectively, technical buying orders accelerated the rise in prices. Thus oil futures traded within their trend channels, which have already been in place since December now, hitting new 4-month highs.

ICE Gasoil contract for February delivery settled at 986.25 USD on Tuesday. This was 15.50 USD above Monday's settlement. With some 44,700 deals the traded volume was below average.

The stochastic oscillator has turned for G.Oil by now, giving off buying signals. The indicator still is bullish for WTI, too, although the buying signal dates a few days back. However, an overbought market situation still prevails, favouring technical profit-taking, and the strong trend channels prevent oil futures from correcting downwards. Thus the technical view is largely bullish this morning and traders can be expected to focus on economic data and the stock market to give direction.

U.S.

Nymex slightly bullish: Given yesterday’s price rally, oil futures at ICE and NYMEX hold at a high level this morning, supported by the rising stock market in Asia (Nikkei 225). Trading interest at NYMEX is below average for this time of day. Market participants are waiting for the European market to open, for signals from forex trading as well as for the DoE oil inventories and the upcoming economic data. Particularly important are the ADP job market report, the GDP pf the USA and the minutes of the FOMC meeting.

API's: Crude oil +4.2; distillates -1.8; gasoline +2.4 million barrels vs previous week. Refinery utilization +0.7%
DOE's; due out tonight
Forecasts: Crude oil + 2.5; distillates -1.1; gasoline +1.0 million barrels vs previous week

Houston (ex-wharf indications 29-01)
380cst $638
180cst $695
MGO $1025

New Orleans (ex-wharf indications 28-01)
380cst $648
180cst $689
MGO $1034

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

The Singapore fuel oil market rebounded $4.0-1.5 during the morning Platts window yesterday. The 380cst cargo premiums were seen at around +$2.0/mt from -$2.25 -$0.27. The delivered bunker premiums were between $3.0 to $7.0 above cargo prices. Bunker fuel oil swaps gained app.$4.5/mt at the front of the forward curve for Singapore papers. Backend was a few dollars higher. This morning the markets are trading slightly higher.

High premiums for prompt deliveries.
380 cst $639
180 cst $643
MDO $960

ARA (Amsterdam - Rotterdam - Antwerp)

Fuel oil demand picked up by the end of last week, backed by stronger market fundamentals and narrowly range-bound crude oil complex. Barge congestion persisted at the port of Rotterdam but waiting time had reduced to two days from five days over the last week. In Antwerp the LSFO availabilities improved, but suppliers were still unable to quote LSFO for prompt deliveries as a consequence of Rotterdam delays and blending problems at local refineries in Antwerp.

Indications for delivered bunkers:
380cst : $ 626
(1.0 %) :$ 655
180cst: $ 656
(1.0 %):$ 685
MGO 0.1%S: $ 985