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Global oil supply has considerably improved after Shell in Nigeria restarted a couple of pipelines, Libyan oil ports have been reopened as strikes were ended and Irak has successfully increased its production capacity by developing new oil fields and expanding existing ones. Once refiners demand for crude oil keeps declining due to the start of seasonal maintenance work oil prices are seen falling further in October. Traders will focus on when Libya will reach its regular production level of 1.5 to 1.6 mbpd and whether the country will be able to get the manifestations permanently under control. As Libya mainly exports high-quality, low-sulfur crude to European customers, the restoring of full exports will have a supporting effect mainy on the Brent prices and thus reduce the price difference between the Brent and the WTI crude. Currently the spread between the two benchmarks is just below six dollars. Geopolitical tensions will also remain in investors' focus. The risk premium on oil prices dropped considerably after a military intervention of the U.S. forces in Syria has become more and more unlikely.

After Tuesday's late rise oil futures kept track of their gains on Wednesday morning. Given the technical buying signals of the stochastic indicator at the Gasoil and Brent charts, quotations surpassed several resistances generating more stop-loss buying orders. The stronger euro, resp. the weaker dollar also prompted market players to raise their long positions and so Brent scratched at the 110 dollars-marker around noon. After the sharp rise oil futures then remained near their highs, however. Some profit taking indicated that upward potential was largely exhausted, with everyone waiting for the DOE's oil inventories data. Since the builds in crude oil stocks had been surprisingly high and refinery demand had sharply declined, oil prices retreated in the course of trading. Oil futures in London and New York lost considerable ground until late in the evening, with the NYMEX crude oil contract taking the lead, completely erasing earlier gains temporarily.

ICE Gasoil contract for October delivery settled at 919.00 USD on Wednesday. This was 13.00 USD above Tuesday's settlement. With some 52,800 deals, the traded volume was above average.

The stochastic indicator is no longer bullish at the Brent chart. At the WTI chart, it doesn't give any buying signal, either. The indicator is only still supporting Gasoil, even though it had already given the buying signal yesterday. If this can have a bullish effect on prices once again (like yesterday), will renewedly depend on whether the indicator will confirm the buying clue with a signal at the WTI or Brent chart. The RSI still doesn't have any impact staying below 30% at the Gasoil and WTI charts. If the indicator exceeded this level, technical analysts would consider it another buying signal. The downtrends at the Gasoil and Brent charts are still intact, however, and so we assess the technical constellation as neutral as long as the stochastic indicator or the RSI don't give any new buying clues.

U.S.

Nymex easing: Futures at ICE have slightly pulled back from yesterday's lows. Yesterday afternoon, they considerably retreated on the release of bearish DOE data. However, there has not been any sustainable counterreaction, yet. 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, particularly the US GDP.

API's: Crude oil -0.1; distillates +0.5; gasoline +0.3 million barrels vs previous week. Refinery utilization -0.4%.
DOE's; Crude oil +2.1; distillates +0.5; gasoline +0.3 million barrels vs previous week. Refinery utilization -0.4%.
Forecasts: Crude oil -1.5; distillates +1.0; gasoline +/- 0.0 million barrels vs previous week.

Houston (ex-wharf indications 25-09)

380cst $613
180cst $680
MGO $1003

New Orleans (ex-wharf indications 25-09)
380cst $615
180cst $652
MGO $1007

Singapore

Crude is back on its bearish track with WTI -$0.62. Singapore paper is turning as well with -$3.75 for 180cst and -$2.50 for 380cst for Oct, and for Nov 180 cst -$3.00 and 380cst -$3.25 with MGO contracts Oct unchanged and Nov -$0.01. The cargo market is gaining still with 180cst +$4.59, 380cst +$4.30.

The Singapore fuel oil market rebounded more than $4.0 during the Asian Platts window yesterday, erasing previous losses. The delivered bunker premiums were seen some $2.5-3.5/mt above cargo prices. Bunker fuel oil swaps gained up to $6.5/mt in the front of the forward curve both for Rtdam and Sing papers. The backend was weaker with cal14 papers assessed app.$4/mt up. This morning markets are trading lower.

380cst $612
180cst $616
MGO $900

Fujairah (delivered indications 26-09)

380cst $610
180cst $668
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 : $595
(1.0 %) :$614
180cst: $607
(1.0 %):$ 640
MGO 0.1%S: $ 895