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After yesterday’s hefty losses, oil markets have seen a slight upward correction as expected. They also drew support from the first gains at European stock markets. While Brent consequently climbed over its second resistance, the American crude even breached several resistances in a row. However, the upturn was limited by the strong resistance at 106.55 USD (WTI). As expected, oil futures hardly moved in the first half of European trading. Since the Fed/FOMC will only give insight into its decisions on monetary policy this evening market players remained cautious. Until shortly ahead of the open of US trading, quotations thus stayed within a rather narrow trading range. Then, however, prices at ICE sharply declined. Whilst market players considered the fundamental situation as rather neutral to bearish in the first place - due to diminishing worries over Syria - news on Libya resuming its oil production after an agreement with striking oil workers added to pressure. Moreover, restart of a trunk line of Shell's TransNiger Pipeline also brought some bearish clues. After first resistance lines had been breached and after the lines of the stochastic indicator had crossed at the Brent chart technical selling orders were generated accelerating the decline. The NYMEX gasoline contract also suffered from this development whereas WTI stopped short of 105.00 dollars. While the futures at ICE settled near their lows, WTI was able to make up for some losses in the late evening. Still, the contract settled in the red.

ICE Gasoil contract for October delivery settled at 925.75 USD on Tuesday. This was 18.50 USD below Monday's settlement. With some 109,900, deals the traded volume was far above average.

Yesterday the lines of the stochastic indicator crossed at the Brent chart, too, providing another selling signal. Therefore, the indicator can be seen as bearish at all charts this morning. The RSI is still neutral but already moving in oversold territory. The contracts at ICE have meanwhile fallen below their mid-term uptrends. This is why we assess the technical situation as bearish this morning. Still, there might be a slight upward correction after yesterday's sharp decline.

U.S.

Nymex gaining: After yesterday's sharp losses, this morning in Asia oil futures edged higher as some market players cut their short positions. Still, larger shifts in positions are unlikely ahead of the DOE's data on US oil stockpiles and before the FOMC's decisions on monetary policy become public. The traded volume at NYMEX is slightly lower than average for this time of day. Market players are now looking ahead to the performance of European markets, new signals from forex trading as well as to US housing data, see economic calendar. Moreover, they will focus on the DOE's data and the FOMC's decisions.

API's: Crude oil -0.3; distillates -0.2; gasoline -0.6 million barrels vs previous week. Refinery utilization +1.3%.
DOE's; due out tonight.
Forecasts: Crude oil -1.5; distillates +1.0; gasoline +/- 0.0 million barrels vs previous week.

Houston (ex-wharf indications 17-09)
380cst $614
180cst $679
MGO $1007

New Orleans (ex-wharf indications 17-09)
380cst $617
180cst $660
MGO $1009

Singapore

Crude is slowing with WTI -$0.07. Singapore paper is bearish still with -$5.40 for 180cst and -$5.35 for 380cst for Oct, and for Nov 180 cst -$5.50 and 380cst -$5.45 with MGO contracts Sep -$1.75 and Oct -$1.65. The cargo market is tracking paper, losing with 180cst -$3.38, 380cst -$3.09 and MGO -0.06.

The Singapore fuel oil markets fell yesterday on previous weaker crude prices, ranging -$3.0 to -$2.0 during the Asian Platts window. The delivered bunker premiums recovered slightly ranging between +$1.0 to +$2.0 above cargo prices. This morning markets are trading slightly lower.

380cst $599
180cst $607
MGO $900

Fujairah (delivered indications 18-09)

380cst $600
180cst $662
MGO $970

ARA (Amsterdam - Rotterdam - Antwerp)

In September (starting week 4) ESSO Antwerp will start working on maintenance of their refinery. Because of this, local Antwerp suppliers will need to buy more product in Rotterdam, therefor long waitinglines at Rotterdam refineries and storage are to be expected, with premiums on price as a result.

Indications for delivered bunkers:
380cst : $591
(1.0 %) :$620
180cst: $621
(1.0 %):$ 652
MGO 0.1%S: $ 905