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West Texas Intermediate traded near a three-month low amid speculation of a gain in oil inventories and concern that the U.S. government’s first shutdown in 17 years will slow economic growth and demand for crude. Futures dropped as much as 0.6 percent, poised for the lowest close in three months. The U.S., the world’s biggest oil user, began a partial shutdown over a budget stalemate yesterday while crude stockpiles climbed by 4.55 million barrels last week, the industry-funded American Petroleum Institute said.

WTI for November delivery dropped as much as 61 cents to $101.43 a barrel in electronic trading on the New York Mercantile Exchange. It was at $102.02 as of 12:47 p.m. London time. The contract yesterday slid 0.3 percent to $102.04, the lowest close since July 3. The volume of all futures traded was about 60 percent below the 100-day average. Brent for November settlement rose by 11 cents to $108.05 a barrel after falling as much as 50 cents, or 0.5 percent, to $107.44 a barrel on the London-based ICE Futures Europe exchange. The European benchmark was at a premium of $6.08 to WTI, compared with $5.90 yesterday. Democrats and Republicans failed to pass the 2014 budget as expected, which resulted in a government shutdown. In the course of morning trading, oil futures still held relatively steady and stayed within their technical limitations. Selling pressure increased, however, at the opening of U.S. markets. Helped by the slightly bearish technical constellation, oil prices then breached their first support. Market players are afraid that the powering down of federal agencies might negatively affect economic recovery in the USA and thus, oil demand. Only in the late evening did oil prices return from their lows, which analysts deemed a technical correction, however. As WTI was not able to sustainably breach its support, traders seized the opportunity to take profits from speculative short positions.. In the end, oil markets settled with losses.

The U.S. investment bank JP Morgan has lowered its price forecast for Brent in Q4 from 117 to 113 USD due to low refinery margins and the probability that crude supply will outstrip demand between October and December. Analaysts see the Brent price at 112 on average in 2014.

ICE Gasoil contract for October delivery settled at 905.25 USD on Tuesday. This was 7.75 USD below Monday's settlement. With some 42,400 deals, the traded volume was below average.

After the Stochastic gave off a selling signal for G.Oil and Brent yesterday, the indicator also remains bearish for ICE contracts this morning. Although the Stochastic's lines are touching at the WTI chart, a fresh selling signal will only arise if they cross. Thus, we maintain our slightly bearish evaluation and still see oil futures trading within their downtrend channel.

U.S.

Nymex bearish: Without fresh signals to give direction, oil futures are trading at yesterday's closing level, still only showing little volatility. The traded volume at NYMEX is below average for this time of day. Investors are now looking ahead to the performance of European markets. to further developments in the USA and are waiting for today's economic indicators and the DoE inventory data.

Houston (ex-wharf indications 01-10)
380cst $608
180cst $673
MGO $990

New Orleans (ex-wharf indications 01-10)
380cst $610
180cst $653
MGO $1000

Singapore

The Singapore fuel oil markets were mixed yesterday ranging between -$1.5 to +$2.0 during the Asian Platts window. There was larger than usual number of physical cargoes traded at high values which further suggested strong bull trading agenda. The delivered bunker premiums were seen between +$2.5 to +$6.5 above cargo prices. This morning markets are trading higher.

380cst $609
180cst $611
MGO $900

Fujairah (delivered indications 02-10)

380cst $610
180cst $667
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. KPC, an other hsfo refinery in Rotterdam is out on maintenace for 4 months. Waiting times are noted for over 1 week at some storages.

Indications for delivered bunkers:
380cst : $590
(1.0 %) :$603
180cst: $620
(1.0 %):$ 633
MGO 0.1%S: $ 880