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Oil prices have been trading with a stronger tendency at the opening of European markets. Especially WTI could still draw support from the bullish data on U.S. crude stocks communicated by the DoE yesterday. Adding to the upward potential are the slightly bullish technical constellation and the stronger euro. Brent and WTI are meanwhile approaching their second resistance.

Market players in London and New York remained in wait-and-see mode Wednesday. Despite a series of economic data, oil prices were consolidating at a high level in a relatively narrow range. Given the bullish API report released Tuesday night as well as the slightly bullish technical constellation, oil futures may have traded with a stronger tendency but gains had remained limited ahead of the DoE inventory data at 4.30 p.m. Only when the American Energy Department communicated a massive draw in U.S. crude stockpiles did oil markets advance, marking their first highs in the late afternoon. However, the resistances at 104.10 USD (Brent) and 94.40 USD (WTI) limited the upturn as a strong decline in U.S. oil imports and in gasoline demand dampened the data’s bullish effect. After this rather unsuccessful upward test and with the release of the Beige Book by the U.S. Fed in the late evening, market players took profits from their long positions. Consequently, oil futures marked new lows. Merely WTI remained above its day’s low due to the enormous drop in crude inventories in Cushing, Oklahoma, and was not pointing down as much in this phase.

ICE Gasoil contract for June delivery settled at 871.00 USD on Wednesday. This was 13.25 USD below Tuesday's settlement. With some 62,000 deals the traded volume was slightly above average.

Although the Stochastic’s lines are converging again at ICE, the indicator remains slightly bullish while the RSI stays neutral. After yesterday’s late losses, short covering could find support with the Stochastic this morning. Resistance around 104.00 USD (Brent) and at 872.50 USD (G.Oil) may limit the upward potential, however. We maintain our neutral to bullish position.

U.S.

Nymex bullish: Without fresh signals, oil futures have returned from yesterday’s lows, slightly correcting upwards thanks to short coverings.
The traded volume at NYMEX is about average for this time of day. Market players are now closely watching the performance of European markets, new cues from forex trading and some economic data to be released in the course of the day.

API: Crude oil - 7.8; distillates +0.2; gasoline -1.3 million barrels vs previous week.
DOE: Crude oil - 6.3; distillates +2.6; gasoline -0.4 million barrels vs previous week.
Forecast: Crude oil - 0.6; distillates +1.5; gasoline +1.2 million barrels vs previous week.

Houston (ex-wharf indications 4-06 )
380cst $582
180cst $645
MGO $952

New Orleans (ex-wharf indications 4-06)

380cst $586
180cst $621
MGO $954

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

Crude is slowing with +$0.41. The paper market is mixed, turning bearish with June 180cst -$2.00 and for 380cst -$1.65, and July contracts with 180cst -$3.00, 380st -$3.00. The cargo market is bullish still 180cst +$6.99, and 380cst +$7.48 and MGO +$2.11.

The Singapore fuel oil markets rose around $7.00 during the Asian Platts window. The bunker demand was said to be quiet on higher outright bunker prices. The delivered bunker premiums eased back down to app.$6.0 above cargoes prices. this morning markets are trading slightly lower.

380cst $601
180cst $616
MGO $875

Fujairah (delivered indications 06-06)

380cst $607
180cst $682
MGO $1020

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $577
(1.0 %) :$ 608
180cst: $ 611
(1.0 %):$ 637
MGO 0.1%S: $ 854