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The price of oil rose slightly Tuesday ahead of a U.S. supply report that is expected to show an improvement in demand. By early afternoon in Europe, benchmark U.S. crude for January delivery was up 29 cents at $94.38 a barrel in electronic trading on the New York Mercantile Exchange. The Nymex contract fell 75 cents to $94.09 on Monday after a deal between Iran and six world powers on the country's nuclear program raised the possibility that sanctions choking Iranian oil exports will eventually be lifted. Brent crude, a benchmark for international oils, was up 7 cents at $111.07 a barrel on the ICE exchange in London. ICE Gasoil contract for December delivery settled at 934.75 USD on Monday. This was 3.00 USD below Friday's settlement. With some 48,000 deals, the traded volume was slightly below average.

Oil futures in London and New York sharply declined on Monday morning given the interim accord between Iran and the western powers over Iran's nuclear program. Iran obliged to limit its nuclear program and to put it under stricter controls. In return, western countries will ease their sanctions against Iran. Market participants thus reduced the risk premium. However, the downward move at oil markets was limited by Brent's strong support at 108.00 dollars. In the course of the day investors realized that the accord won't have any larger impact on physical oil supplies as the oil embargo against Iran had not been eased. Oil futures were also buoyed by news saying that tensions in Libya continue exacerbating. Meanwhile, the army has been put on alert. After Brent and Gasoil bounced off their strong supports at 108.00 dollars, 918.50 dollars resp., oil futures regained ground settling higher than on Monday. The technical selling signal provided by the RSI in the morning was not confirmed by the stochastic indicator. Therefore, the signal waned in the afternoon. Compared to ICE futures, WTI remained relatively weak and so the spread between Brent and WTI widened to almost 17 dollars, the highest level since March.

The lines of the stochastic indicator have already crossed at the WTI chart giving a bearish signal. Still, given the spread bets and WTI's extraordinary position, we are not including the US crude oil contract in our general technical assessment today. At the Brent and the Gasoil chart, the lines of the stochastic indicator are touching but have not yet crossed. Therefore, the indicator is still neutral. The RSI hovers above 70% and will only give a selling signal if it falls below this threshold. According to the situation at the ICE, and as selling signals are still lacking, we assess the technical constellation as neutral this morning. If the lines of the stochastic indicator cross in the cours of the day or if the RSI drops below 70%, the technical constellation will turn bearish, however, triggering some profit taking.

U.S.

Nymex neutral: After yesterday's highs and lows, oil futures consolidated on a high level this morning as traders wait for new cues. The traded NYMEX volume is slightly below average for this time of day. Market players are now focusing the development at European markets, new signals from forex trading and today's economic indicators.

For the first time since mid-September, analysts expect a draw in US crude oil stockpiles. Distillate stocks are expected to have declined as well, whereas gasoline inventories are to show builds.

Survey: crude oil -0,3; distillates -1,0; gasoline +1,0 vs million barrels previous week

These are the estimates of 7 US analysts. They are the mean of the single estimates.

Market participants expect that refinery run rates will rise again as seasonal maintenance work is concluded and winter demand is starting to show. This should also have an impact on crude oil stockpiles. Distillate stocks are expected to decline even more sharply than those in crude oil as last week's figures (DOE) showed a -4.8 million-barrels-decline in distillate inventories. This is due to winter demand, with heating oil demand having sharply climbed. Gasoline stocks are to have increased, however, as gasoline demand retreats in the winter months and as refinery run rates are expected to rise.

The API's report on US oil inventories will be released tonight at 10.30 p.m. whereas the DOE's data will be released on Wednesday at 4.30 p.m.

Houston (ex-wharf indications 21-11)
380cst $590
180cst $658
MGO $979

New Orleans (ex-wharf indications 21-11)
380cst $592
180cst $644
MGO $982

Singapore

Crude is gaining with WTI +0.96. Singapore paper is turning bullish with +$1.50 for 180cst and +$1.25 for 380cst for Dec, and for Jan 180 cst +$2.00 and 380cst +$2.75 with MGO contracts Dec +$1.70 and Jan +$1.62. The cargo market is not turning yet with 180 cst -$4.98 380cst -$5.69 and MGO -$0.15.

380cst $600
180cst $605
MGO $935

Fujairah (delivered indications 26-11)

380cst $618
180cst $664
MGO $1015

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $580
(1.0 %) :$625
180cst: $610
(1.0 %):$ 655
MGO 0.1%S: $ 912