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Crude-oil futures edged higher Wednesday ahead of a closely watched reading on U.S. oil inventories that is expected to show a rise in stockpiles due to sluggish demand in the world's biggest crude consumer. The Energy Information Administration is expected to report U.S. oil inventories rose 1.2 million barrels last week, according to a survey of analysts by Dow Jones Newswires. Late Tuesday, a separate report from the American Petroleum Institute showed an unexpected drop in stockpiles, indicating demand may be stronger than expected.Light, sweet crude for June delivery recently gained 59 cents, or 0.7%, to $89.77 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange rose 43 cents, or 0.4%, to $100.74 a barrel.

The oil market was dominated by broad selling yesterday morning. Oil futures breached their first supports due to weak economic data out of China and the EU. They recovered, however, in the afternoon. Although the indicators released in the USA were not really encouraging, oil prices benefited from the strong stock markets and the still slightly bullish technical constellation. Thus, oil futures escaped their medium-term downtrend to the top, fighting their way back into the winning zone and testing their first resistances at 100.60 USD (Brent), 842.00 USD (G.Oil) and 89.45 USD (WTI). However, oil prices failed to breach them sustainably. The API data on U.S. oil inventories, which had been released last night at 10.30 p.m. came out slightly more bullish than expected. Although they have not made an impact at the oil market yet, they may limit downward potential until the DoE will be released at 4.30 p.m. today.

ICE Gasoil contract for May delivery settled at 839.50 USD on Tuesday. This was 2.75 USD above Monday's settlement. With some 52,100 deals the traded volume was about average.

The RSI is slightly bullish at the Brent chart this morning as the indicator breached the 30%-line bottom-up. At the G.Oil chart, it still stays below this level but might also pierce through this line in the course of the day. The Stochastic oscillator remains slightly bullish although its lines are gradually converging again and approach the overbought zone. When oil futures escaped their steep downward trend channel on Monday, traders seized the opportunity for short-coverings and thus support the current upward correction by which the Stochastic’s buying signals have been successively worked off. As a result, the market is not oversold anymore and a short-term uptrend has formed, which definitely provides more leeway to the top. Thus, we stick to our neutral to bullish stance this morning.

U.S.

Nymex bullish: Oil futures hold steady this morning as the Asian stock markets perform well and the API data, which were released, last night, did not make a considerable impact. The traded volume at NYMEX is on average for this time of day. Market players are now eying the performance of European markets, fresh signals from forex trading and the upcoming economic indicators, with particular focus on the DoE data, which will be released in the afternoon.

DOE: due out tonight.
Forecast: Crude oil + 1.4; distillates +0.2; gasoline +0.0 million barrels vs previous week.
API: Crude oil - 0.8; distillates +0.7; gasoline -2.7 million barrels vs previous week.

Houston (ex-wharf indications 23-04 )
380cst $578
180cst $631
MGO $945

New Orleans (ex-wharf indications 23-04)
380cst $586
180cst $636
MGO $950

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

Crude has turned bullish with +$1.40. The paper market following, with May 180cst +$5.50 and for 380cst +$5.20, and June contracts with 180cst +$4.85, 380st +$5.15 The cargo market is mixed, with 180cst -$3.10, and 380cst -$2.34 and MGO +$0.16.

The Singapore fuel oil markets fell more than -$2.25 during the Platts window yesterday. The delivered bunker premiums eased slightly to around $8.5 to $9.5 above cargo prices yesterday as crude prices softened after the window. Supplies were said to be still tight on prompt dates due to more incoming cargoes congesting terminals.

High premiums for prompt deliveries.
380 cst $593
180 cst $599
MGO $850

Fujairah (delivered indications 24-04)

380cst $600
180cst $649
MGO $955

ARA (Amsterdam - Rotterdam - Antwerp)

A lot of congestion in ARA for both ifo and gasoil. Therefor for prompt enquiries, high premiums can be inspected. Many suppliers do expect this situation for still at least a couple of days.

Indications for delivered bunkers:
380cst : $572
(1.0 %) :$ 585
180cst: $ 602
(1.0 %):$ 615
MGO 0.1%S: $ 817