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Brent crude oil futures were slightly lower in London trading Wednesday, as demand in Europe continued muted. At 0939 GMT, the front-month contract for June Brent on London's ICE futures exchange was down 39 cents, or 0.36%, at $104.02 a barrel. The front-month light, sweet crude contract for May on the New York Mercantile Exchange was trading down 15 cents, or 0.16%, at $95.47 a barrel.

Oil markets in London and New York were rangebound Tuesday morning before gradually trading up in the early afternoon. Boosted by the Fed’s and the ECB’s expansive measures, market sentiment has been very positive and investors shifted their capital into risky assets. The good mood at financial markets then spilled over to the oil market. As a result, ICE futures breached their first resistances, automatically triggering technical selling orders. Moreover, the oil market saw increased spread bets on Brent and WTI again yesterday after several analysts forecast a widening of the difference in price between the two crude benchmarks. Supported by the bullish news on a refinery malfunction at the Mongstad terminal in Norway (capacity: about 240,000 mbpd - see here) and by the new North Sea crude embarkment programme according to which around 150,000 barrel/day less crude will be available in June compared with may (see here), oil futures traded with a strong tendency into the evening. Upside was, however, limited by Brent’s and G.Oil’s resistances at 106.00 USd and 871.25 USD, respectively, whereas WTI – apart from a short skipper in the afternoon– stayed below 96.00 USD. In the late evening, market players seized the price level to take profits from long positions thanks to the EIA’s monthly energy report which was published the FS editorial office had already been closed. While G.Oil could keep part of its gains, profit-taking erased Brent’s. Speculative spread bets that traders had placed in the afternoon were liquidated again. Consequently, the North Sea crude settled in the red and the spread between the two crude contracts narrowed from 9.90 USD to 8.60 USD.

ICE Gasoil contract for May delivery settled at 868.50 USD on Tuesday. This was 9.75 USD above Monday's settlement. With some 57,800 deals the traded volume was about average.

The Stochastic remains neutral at ICE and NYMEX charts this morning but its lines are already converging as can be clearly see. If they crossed in the course of the day, the indicator would give off a selling signal to the market. The RSI may still be neutral but as the Stochastic oscillators indicates a slightly overbought market situation, a technical selling signal becomes more likely. But since it is still lacking, we assume neutral stance for the time being.

U.S.

Nymex bearish: Driven by higher oil imports and a positive trade balance for April in China, oil futures advance early this morning, slightly correcting upwards from last night’s lows. 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, Germany’s industrial production figures and the DoE report at 4.30 p.m.

Survey: Crude oil +1.4; distillates +0.4; gasoline +0.2 million barrels vs previous week.
API: Crude oil +0.7; distillates +11 ; gasoline -0.2 million barrels vs previous week.
DOE: Due out tonight.

Houston (ex-wharf indications 7-05 )
380cst $608
180cst $652
MGO $974

New Orleans (ex-wharf indications 7-05)
380cst $615
180cst $652
MGO $960

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

Crude is neutral with +$0.26. The paper market is dropping still, with May 180cst -$4.50 and for 380cst -$2.75, and June contracts with 180cst -$2.75, 380st -$2.05. The cargo market is gaining, with 180cst +$0.31, and 380cst +$1.79 and MGO +$0.67.

The Singapore fuel oil markets gained between +$0.25 to +$2.0 during the morning Platts window yesterday. Bunker demand was said to be slow. The delivered bunker premiums slipped to app. $8.0 above cargo prices yesterday. This morning the markets are trading down.

High premiums for prompt deliveries.
380 cst $618
180 cst $626
MGO $870

Fujairah (delivered indications 07-05)

380cst $625
180cst $674
MGO $1000