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Crude-oil futures prices posted modest gains Thursday as strong economic signals were partly offset by worries about sluggish demand and high supplies. Traders said prices were due for a rebound after both the U.S. and European benchmark crudes shed 3.7% over the previous two days on signs of sluggish demand growth in the U.S. and China, the world's top two oil consumers. In the U.S., government data Wednesday showed the highest crude oil inventories since 1981 and weak gasoline demand heading into the peak driving season. A move by the European Central Bank to cut its main refinancing rate by 25 basis points on Thursday was largely priced into the market, traders said, though it helped to lift North Sea Brent back above $100 a barrel, after it settled below that level for the first time in two weeks on Wednesday.

Whilst on Tuesday oil futures but moderately declined, the plummeted on Wednesday. Prices had already been pressured by technical selling signals and disappointing economic indicators out of China at the beginning of the session. In the course of trading, weaker-than-expected economic data out of the USA failed to improve the negative investor sentiment. In addition to this, reports regarding a planned increase in Saudi Arabia's production capacity and a rise in the OPEC's oil output in April weighed on the market. The DOE's oil inventories data delivered more bearish clues. The weekly report showed a record high in crude oil stocks and a lower demand. In the following, Brent even fell below the psychological mark of 100 dollars. WTI also sharply declined only stopping short of 90 dollars. In all, the overbought technical situation has erupted in a massive downward move as the fundamental news also favoured profit taking from long positions. Since the traded volume was rather low due to the holiday in many countries, oil futures at ICE and NYMEX hit new week-lows settling with considerable losses.

ICE Gasoil contract for May delivery settled at 822.75 USD on Wednesday. This was 23.00 USD below Tuesday's settlement. With some 31,700 deals, the traded volume was below average.

Kinder Morgan is building a 27-mile, 12-inch lateral pipeline to the Sweeny refinery from its 300,000 bpd crude and condensate pipeline that moves Eagle Ford output to the Houston Ship Channel. The larger pipeline started up in June last year. The lateral pipeline's initial capacity was 30,000 bpd, but Kinder Morgan said it will increase to 100,000 bpd. The company will add new pumps and an additional 120,000-barrel storage tank at its pump station in Wharton County, Texas.

The stochastic indicator is still bearish this morning at ICE and NYMEX charts whereas the RSI can meanwhile be considered as neutral again. Both indicators gave selling signals lately (the stochastic indicator's lines crossed in overbought territory; the RSI fell below the 70%-line) favouring yesterday’s downward move. Even though the decline has certainly spend some of the bearish potential, we expect that the technical situation still provides some more leeway down.

U.S.

Nymex neutral: After having retreated in the course of the day, oil futures slightly rose after the FOMC's meeting yesterday evening. They are now consolidating on a higher level. The retreating Asian stockmarkets (Nikkei 225) might weigh on futures in the course of the morning. Traded volume at NYMEX is on average for this time of day. Investors are now waiting for the performance of European markets, for fresh signals from forex trading as well as for a series of economic data to be released in the USA and the euro zone, which are to provide further cues on the state of the economy.

Houston (ex-wharf indications 1-05)
380cst $590
180cst $642
MGO $976

New Orleans (ex-wharf indications 1-05)
380cst $601
180cst $648
MGO $975

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

Crude is bearish with -$3.36. The paper market is following, with May 180cst -$11.50 and for 380cst -$12.50, and June contracts with 180cst -$13.10, 380st -$12.50 The cargo market is bullish, with 180cst +$3.30, and 380cst +$1.91 and MGO +$0.01.

Singapore markets gained a few dollars during the morning Platts window yesterday as 180cst product rose app.$3/mt while 380cst was assessed app. $2/mt up. Today, the Singapore market is closed for International Labor Day and will reopen tomorrow. This morning the markets are trading slightly down.

High premiums for prompt deliveries.
380 cst $600
180 cst $609
MGO $835

Fujairah (delivered indications 02-05)

380cst $608
180cst $658
MGO $945

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $572
(1.0 %) :$ 582
180cst: $ 602
(1.0 %):$ 612
MGO 0.1%S: $ 840