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Nymex crude oil prices rose during Asian trading this morning after a rather neutral supply report, with the commodity remaining bullish due to a solid U.S. service-sector barometer. Brent crude rose further this morning, bouncing up from a near three-month low hit at the start of the week as traders weighed Libyan supply disruptions against fears turmoil in emerging economies could slow global growth.

Oil futures in London and New York started with a slightly steadier tendency on Wednesday morning. They were supported by the considerable draw in Cushing crude oil stocks reported by the API Tuesday night and by the bullish signal of the RSI which surpassed 30% at the Brent chart. Since the other technical indicators didn't confirm this buying signal and traders already focused on the DOE's oil inventories report, market players took some profits in the early afternoon. Accordingly, oil prices tested their downward potential in the course of the afternoon. However the downside remained limited, as well. The DOE's data, which were released at 4.30 p.m. were neither considered significantly bullish, nor clearly bearish. Thus they failed to give oil markets a new direction. Even though the bearish aspects of the data initially seemed to gain the upper hand, briefly increasing selling pressure, the downward move was not sustainable. After NYMEX gasoline pulled back from its low, the rest of the contracts were dragged along. Since the draw in Cushing crude oil inventories had already been priced in after the release of the API's report, the spread between Brent and WTI didn't continue narrowing after the release of the DOE's data. It even widened to 8.80 dollars.

OPEC: Kuwait faces the threat of an oil workers strike. The head of the Kuwait Oil Workers Union said the union decided to go on strike within two weeks. There is no date fixed yet. Cause of the strike is the reduction of the annual bonus paid to the over 19,000 employees.

Kuwaiti Oil Minister Ali al-Omair said that if oil workers carry out a threat to go on strike, his country has a contingency plan to ensure that production is not disrupted. If the oil trade unions do not call off the strike by the beginning of next week, the national guard, the interior ministry an other ministries will take all measures to protect the employees and installations, the minister told the press. If the workers do act, "we have employees... to operate refineries and production lines for Kuwait to meet its commitments internally and abroad," he added.

ICE Gasoil contract for February delivery settled at 899.00 USD on Wednesday. This was -7.25 USD below Tuesday's settlement. With some 52,000 deals, the traded volume of the front month was on average.

The buying signal the RSI gave yesterday morning has meanwhile waned. Instead, the lines of the stochastic indicator have crossed at the Brent and the WTI chart giving bullish signals. At the Gasoil charts, the stochastic indicator hasn't given a confirming signal yet and the RSI is below 30% at NYMEX and at ICE charts which means it is not yet bullish. Formally, the technical constellation is slightly bullish, still, given the buying signal of the stochastic indicator at the Brent and the WTI chart. Therefore, we consider the technical situation as neutral to bullish this morning. For the Brent contract, considerable upward potential might develop if the contract surpasses yesterday's high.

U.S.

Nymex neutral: The DOE's report on US oil stockpiles failed to give markets a new direction and so, this morning, oil futures remained nearly unchanged compared to yesterday's settlement levels. The traded volume at NYMEX is slightly below average for this time of day. Traders are now monitoring the development at stock markets looking ahead to new cues from forex markets. They will also keep eying the situation in Libya. Moreover, they are waiting for today's economic data.

DOE: Crude oil +0.4; Distillates -2.4; Gasoline +0.5 million barrels vs previous week.
API: Crude oil +0.4; Distillates -1.5; Gasoline -1.2 million barrels vs previous week.
Forecasts: Crude oil +2.3; Distillates -2.5; Gasoline +1.4 million barrels vs previous week.

Houston (ex-wharf indications 6-2)
380cst $590
180cst $666
MGO $1006

New Orleans (ex-wharf indications 6-2)
380cst $604
180cst $643
MGO $1009

Singapore (delivered indications 6-2)

WTI is cooling slightly, dropping slightly with -$0.15. Singapore paper is on a bearish track with -$2.50 for 180cst and -$1.25 for 380cst for Feb, and for Mar 180 cst -$1.50 and 380cst -$1.85 with MGO contracts being slightly bullish Feb +$0.10 and Mar $0.00. The cargo market is bearish with 180 cst -$0.17, 380cst -$1.40 and MGO +$0.71.

Delivered bunker 380cst in Singapore where heard ranging between 605.00/mt – 610.00/mt and Ex-wharf 380cst closed unchanged from Tuesday 615.00/mt. Overall sentiment within FO paper looks to continue this week soft versus crude numbers and with expectation in the physical market to be less tight next coming weeks ahead. This morning both markets are trading higher.

380cst $620
180cst $632
MGO $920

Fujairah (delivered indications 6-2)

380cst0 $615
180cst $642
MGO $980

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $576
(1.0 %) : $616
180cst: $606
MGO 0.1%S: $ 877