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Nymex crude prices fell slightly during Asian trading hours on this morning after climbing to their 2014 high on Wednesday as the markets weighed weather concerns in the U.S. along with heating oil inventories.

After Tuesday's price surge oil futures in London and New York saw some profit taking yesterday morning. Prices edged down to their first supports but in the course of the afternoon they increasingly regained ground. Against the backdrop of production losses in Libya and in South Sudan and given the troubles in Venezuela, market fundamentals remained bullish. The breachment of the first resistance at Gasoil finally triggered more technical buying, which underpinned the steadier tendency in the evening. Particularly NYMEX Heating Oil and ICE Gasoil gained considerable ground in late trade as investors expected a renewed draw in distillate stocks. Market players also raised their bets on the spread between Brent and WTI yesterday. Since it is expected that Cushing crude oil stocks have continued declining, investors increased their long positions in WTI and their short positions in Brent betting on a narrowing of the spread between the two benchmark crude oil sorts. The spread thus narrowed to about 7.40 USD. The API's data on US oil inventories released last night provided a rather bearish note for refined products. Still, quotations at ICE and NYMEX settled near their intraday highs only retreating this morning.

ICE Gasoil contract for March delivery settled at 940.50 USD on Wednesday. This was +7.50 USD above Tuesday's settlement. With some 58,100 deals, the traded volume was on average.

The RSI slipped below 70% at the Brent and the Gasoil chart this morning giving a first selling signal. The stochastic indicator can still be considered neutral at the moment as its lines haven't clearly crossed yet. The downward move earlier this morning has already spent some of the bearish potential and so we assess the technical constellation as neutral to bearish this morning. If the stochastic indicator confirms the selling signal of the RSI in the course of the day, the constellation would turn clearly bearish, however. The fact that the market has lately been overbought would favor more technical downward corrections. At the WTI chart, both the RSI and the stochastic indicator. If the indicators at the US crude oil chart confirmed the bearish signals at the ICE charts, however, it might add to the technical selling pressure.

U.S.

Nymex neutral: Oil futures considerably declined in electronic trading this morning weighed down by the selling signals at ICE charts and by weak data out of China. In part, quotations even dropped below yesterday's lows. The traded volume at NYMEX is on average for this time of day. Investors are now eying the development at stock markets waiting for new cues from forex markets and today's economic data. They also look ahead to the DOE's data on US oil inventories due at 5 p.m..

API: Crude oil -0.5; Distillates -0.7; Gasoline +1.4 million barrels vs previous week.
Forecasts: Crude oil +1.8; Distillates -1.8; Gasoline -0.9 million barrels vs previous week.

Houston (ex-wharf indications 20-2)
380cst $605
180cst $682
MGO $1019

New Orleans (ex-wharf indications 20-2)
380cst $625
180cst $659
MGO $1020

Singapore (delivered indications 20-2)

WTI is bullish with +$0.54. Singapore paper remains bullish with +$0.50 for 180cst and +$0.40 for 380cst for Mar, and for Apr 180 cst +$0.25 and 380cst +$0.15 with MGO contracts being bearish Mar +$0.35 and Apr +$0.34. The cargo market is bullish with 180 cst +$4.74, 380cst +$4.63 and MGO +$1.07.

The Singapore fuel oil market gained $4.0-5.0/mt during the Asian Platts window yesterday. Delivered bunker premiums have fallen more than 50% after reaching the highest level for this year at the beginning of February. Suppliers reported average demand and fine avails. This morning both markets are trading slightly higher.

380cst $622
180cst $632
MGO $938

Fujairah (delivered indications 20-2)

380cst0 $618
180cst $650
MGO $985

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $593
(1.0 %) : $642
180cst: $623
MGO 0.1%S: $ 890