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Crude oil futures edge higher in Asia Wednesday after the possibility of a quick diplomatic easing of tensions between the U.S. and Iran dimmed at a United Nations meeting of world leaders. The U.S. President Barack Obama argued the U.S. case before world leaders for resolving the Middle East’s deepest conflicts, but faced pushback from Iran which dimmed hopes that had been building for a rapid leap forward.

Against the backdrop of bearish market fundamentals and a bearish technical constellation, oil futures at ICE and NYMEX initially retreated on Tuesday. The break below several supports generated further automatic stop-loss selling orders adding to selling pressure. Economic data out of the USA released in the afternoon have missed expectations. Therefore, market players largely raised their short positions until late in the afternoon. Gasoil even dropped to its psychological support at 900.00 USD, which proved strong. Later in the evening prices in London and New York surged, however. A fire at a US refinery particularly triggered considerable buying orders with the NYMEX gasoline and heating oil contracts. This send the other contracts higher as well. While ICE Gasoil only pared its earlier losses after the submission deadline, Brent even hit a new high last night.

ICE Gasoil contract for October delivery settled at 906.00 USD on Tuesday. This was 7.00 USD below Monday's settlement. With some 81,500 deals, the traded volume was above average.

After the stochastic indicator gave a selling signal at ICE, the bearish potential resulting from this signal already seems to be spent. The lines of the indicator have already met at the WTI chart, whereas they have already crossed at the ICE Gasoil chart, which formally makes the indicator bullish here. The RSI indicates that the market is slightly oversold moving below 30% at the WTI and the Gasoil chart. If the indicator exceeded this level, a buying signal would be triggered. Since the stochastic indicator only gives a buying proposition for the Gasoil so far, we assess the technical constellation as only slightly bullish this morning, the more so as confirming signals at the Brent and the WTI charts are still lacking.

U.S.

Nymex bullish: After yesterday evening's increase in product prices oil futures at ICE and NYMEX hold steady this morning.

The traded volume at NYMEX is slightly below average for this time of day. Investors are now looking ahead to the performance of European markets and new signals from forex trading or today's economic indicators. They will also eye the DOE's data on US oil inventories due later this afternoon.

API's: Crude oil -0.1; distillates +0.5; gasoline +0.3 million barrels vs previous week. Refinery utilization -0.4%.
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 24-09)
380cst $616
180cst $683
MGO $1000

New Orleans (ex-wharf indications 24-09)
380cst $617
180cst $655
MGO $1003

Singapore

Crude is starting to turn with WTI +$0.17. Singapore paper is bullish as well gaining with +$5.00 for 180cst and +$4.50 for 380cst for Oct, and for Nov 180 cst +$5.00 and 380cst +$4.35 with MGO contracts Oct +$0.80 and Nov +$0.80. The cargo market is not yet responding with 180cst -$1.45, 380cst -$1.16.

The Singapore fuel oil markets fell another $2.0 during the Asian Platts window yesterday. There were some signs of market seeing some rebalancing in the fundamentals. The delivered bunker premiums were app. $2.5/mt above cargo prices. This morning markets are trading higher.

380cst $612
180cst $616
MGO $900

Fujairah (delivered indications 25-09)

380cst $613
180cst $671
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 : $600
(1.0 %) :$619
180cst: $618
(1.0 %):$ 645
MGO 0.1%S: $ 900