---

West Texas Intermediate oil fluctuated following its longest rally in 3 1/2 months as traders await publication of U.S. employment data. Futures fell 0.1 percent in New York after climbing the same amount earlier. They advanced a fifth day yesterday, the longest increase since August, after the Census Bureau said U.S. gross domestic product expanded at a 3.6 percent annual rate in the third quarter. Employers probably added 185,000 workers to non-farm payrolls last month and unemployment slid to match a five-year low, economists said before separate data today. WTI for January delivery was at $97.24 a barrel in electronic trading on the New York Mercantile Exchange, down 14 cents, at 10:20 a.m. London time. The contract increased 18 cents to $97.38 yesterday, the highest close since Oct. 29. The volume of all futures traded was about 34 percent below the 100-day average. Prices gained 4.9 percent so far this week, the most since July 5. Brent for January settlement advanced 45 cents to $111.43 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $14.32 to WTI. The spread was $13.60 yesterday, the narrowest based on closing prices since Nov. 19.

ICE Gasoil contract for December delivery settled at 947.25 USD on Wednesday. This was 1.50 USD above Tuesday's settlement. With some 36,600 deals, the traded volume was far below average.

After Tuesday's gains, oil futures at ICE retreated in Wednesday-morning trading still slightly weighed down by the API's report on US oil inventories released on Tuesday night. The API's data prompted investors to cut some of their spreadbets which lead to some selling of Brent and Gasoil. Moreover, market players expected that, at its regular meeting, the OPEC would decide to leave its output ceiling unchanged at 30 mbpd stoking concern that the market might be oversupplied next year. When the cartel confirmed the 30 mbpd-ceiling early Wednesday afternoon, oil futures briefly declined but without seeing any sustainable downward correction as the decision had come as no surprise. Traders refocused on US oil inventories data, with the DOE's report due at 4.30 p.m. on Wednesday afternoon. The DOE's figures had a slightly bullish tone for WTI and a bearish note for product futures. Immediately after the release of the data market players showed but a subdued reaction, however. The bullish impact on WTI and the bearish impact on the other quotations only showed later in the evening. Accordingly, product and ICE futures marked some losses last night while WTI traded near its first resistance.

The stochastic indicator is currently neutral at the Brent chart as its lines have not crossed yet. At the Gasoil chart, the lines of the indicator are running parallelly which is why the indicator is neutral here, too. However, the RSI gives a selling signal at the Brent and the Gasoil chart as it has dropped below 70%. We thus regard the technical situation as slightly bearish this morning. The bearish note will get stronger if the stochastic indicator also gives a selling signal at the Brent chart.

U.S.

Nymex bearish: This morning, oil markets have not seen larger moves so far, with quotations trading near yesterday's lows. The traded NYMEX volume is slightly below average for this time of day. Market players are now eying the development at European markets, new signals from forex trading and cues from today's economic indicators.

Houston (ex-wharf indications 02-12)
380cst $594
180cst $669
MGO $984

New Orleans (ex-wharf indications 02-12)
380cst $614
180cst $649
MGO $988

Singapore

Crude is neutral with WTI -0.09. Singapore paper is bearish with -$2.75 for 180cst and -$2.75 for 380cst for Dec, and for Jan 180 cst -$2.75 and 380cst -$2.50 with MGO contracts Dec -$0.18 and Jan +$0.05. The cargo market is mixed with 180 cst +$4.65 380cst +$2.96 and MGO -$1.06.

The Singapore fuel oil markets rose more than $3.0 during the Asian window yesterday despite the lower crude values. The Asian fuel oil crack strengthened considerably yesterday. The Singapore heavy residual inventory saw a slight build of +0.48 mbbl to 20.80 mbbl. The delivered bunker premiums fell to +$4.5 to +$5.5 above cargo prices on softer bunker demand. This morning markets are trading lower.

380cst $604
180cst $610
MGO $945

Fujairah (delivered indications 06-12)

380cst $624
180cst $669
MGO $1025

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $584
(1.0 %) : $625
180cst: $614
MGO 0.1%S: $ 900