---

The price of oil dipped Wednesday amid ongoing concerns about the U.S. budget standoff and a day after the International Monetary Fund lowered its forecast for global growth through the end of next year. By early afternoon in Europe, benchmark crude for November delivery was down 24 cents to $103.25 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 46 cents to settle at $103.49 on the Nymex on Tuesday. Oil prices have bounced around between $101 and $104 a barrel after the U.S. government was forced to partially halt operations last week. The shutdown occurred when Congress failed to agree on short-term funding for the nation past the end of the fiscal year on Sept. 30.Ample oil supplies and the impact of a strengthening dollar were also keeping oil prices down. The dollar, meanwhile, recovered after recent losses — the euro was down 0.4 percent against the U.S. currency, to $1.3510. A stronger dollar makes commodities like crude oil priced in dollars more expensive and a less enticing investment for traders dealing in other currencies. Brent, the benchmark for international crudes, was down 35 cents to $109.81 on the ICE Futures exchange in London.

Oil futures at ICE and NYMEX showed a steadier tendency Tuesday morning. After having breached their first resistances, prices surged. According to analysts, the sharp move was chiefly caused by stop-loss buying orders, which were automatically generated when the first resistances had been breached. NYMEX futures are also likely to have been buoyed by the restart of the Seaway pipeline which had briefly been shut down on Monday evening. Apparently, some refineries hesitated to buy WTI on Monday but covered their needs yesterday. In the afternoon, oil markets struggled to find a clear direction and so futures consolidated on a high level. The EIA's monthly energy report, according to which the agency expects global oil demand to be marginally higher in 2013 and 2014, slightly bolstered oil prices. Moreover, remarks of President Obama that he was "happy to talk with [the head of the House of Representatives John Boehner] and other Republicans about anything" have spurred hopes that there will at least be a transitory solution in the US-budget dispute. The API's data on US oil inventories released late yesterday evening came in mixed as crude oil stockpiles significantly increased but product inventories declined. Even though there was light profit-taking in late trade yesterday, with futures pulling back from their highs, oil prices still settled with gains.

ICE Gasoil contract for October delivery settled at 935.50 USD on Tuesday. This was 9.25 USD above Monday's settlement. With some 41,000 deals, the traded volume was below average.

The lines of the stochastic indicator crossed at the WTI chart yesterday but nevertheless, the indicator remains bearish this morning. At the Gasoil and Brent charts, the Stochastic has not given any new signals so far. Still, the indicator's lines have already met at these charts. If they crossed in the course of the day, technical selling pressure might increase prompting investors to take some profits. The RSI is unlikely to deliver any signals today - neither for ICE, nor for NYMEX contracts. Thus, from a merely technical stance, we still assess the technical situation as slightly bearish. However, there will only be more significant downside if the stochastic indicator also gives a selling signal at the Brent and Gasoil charts.

U.S.

Nymex bullish: Oil prices have slightly retreated in early morning trading. Trades for the October Gasoil contract become fewer as the contract is going to expire tomorrow. The traded volume at NYMEX is below average for this time of day. Investors are now keeping an eye on the performance of European markets, looking ahead new signals from forex trading, some economic indicators and the DOE's data.

Houston (ex-wharf indications 09-10)
380cst $608
180cst $663
MGO $1001

New Orleans (ex-wharf indications 09-10)
380cst $612
180cst $658
MGO $91004

Singapore

Crude is neutral with WTI -$0.16. Singapore paper is bullish with +$9.25 for 180cst and +$8.25 for 380cst for Oct, and for Nov 180 cst +$7.75 and 380cst +$6.50 with MGO contracts Oct +$0.25 and Nov +$0.53. The cargo market is bearish still with 180cst -$5.70, 380cst -$7.87 and MGO +1.81.

The Singapore fuel oil markets fell more than $5.5 during the Platts window yesterday. The Asian fuel oil cracks saw strong sell- off. The delivered bunker premiums also weakened marginally to range between +$5.0 to +$6.5 above cargo prices. This morning markets are trading higher.

380cst $609
180cst $611
MGO $925

Fujairah (delivered indications 09-10)

380cst $610
180cst $667
MGO $995

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $586
(1.0 %) :$605
180cst: $616
(1.0 %):$ 636
MGO 0.1%S: $ 986