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Nymex crude prices fell during Asian trading hours this morning after rising overnight on the news that oil stockpiles rose less than expected, a sign cold winter weather may be taking its toll on the nation's inventories.

Since there were some technical buying signals on Tuesday and the API's report on US oil inventories came in slightly bearish, oil futures at ICE edged lower on Wednesday morning testing their downward potential. Whilst Gasoil briefly fell below its first support, Brent failed to breach its support at 109.20 dollars. At NYMEX, WTI and Heating Oil remained rather steady as investors expected the DOE's data (due later yesterday afternoon) to show a draw in distillate and Cushing crude oil stocks. Accordingly, market players renewedly increased their spreadbets making the spread between Brent and WTI narrow to about 7 dollars. There were but few economic indicators on the agenda yesterday, and so traders were completely focused on the DOE's data on US oil inventories, which were released at 4.30 p.m. in the afternoon. To many market players' surprise, the DOE's report came in slightly bullish giving oil futures a fillip. In the course of the evening, momentum already waned, however. Quotations at ICE pulled back from their highs. This morning Brent has already tested its strong support at 109.20 dollars again.

ICE Gasoil contract for March delivery settled at 926.50 USD on Wednesday. This was +1.25 USD above Tuesday's settlement. With some 48,700 deals, the traded volume was slightly below average.

ICE Gasoil has dropped below its uptrend, given the selling signals it had seen in the past few days. Even though there are no new signals this morning, the current situation points to a slightly bearish technical constellation that might bring about a downward correction. Brent and WTI are still moving within their trends but might also test the supports at the lower limits of these trends, too. The RSI at the WTI chart might give a selling signal if it drops below 70%. Consequently, we assess the technical situation as neutral to bearish this morning.

U.S.

Nymex cooling: After their temporary rise following the release of the DOE's oil inventories data, futures at ICE already saw some profit taking yesterday evening. This morning, they kept track of their losses, even though Brent's strong support at 109.20 dollars is still limiting the downside. The traded volume at NYMEX is on average for this time of day. Market players eye the development at the stock and forex markets and wait for today's economic data.

Forecasts: Crude oil +1.3; Distillates -1.5; Gasoline -1.0 million barrels vs previous week.
API: Crude oil +0.8; Distillates -0.7; Gasoline -0.3 million barrels vs previous week.
DOE: Crude oil +0.1; Distillates +0.3; Gasoline -2.8 million barrels vs previous week.

Houston (ex-wharf indications 27-2)
380cst $608
180cst $682
MGO $1018
New Orleans (ex-wharf indications 27-2)
380cst $640
180cst $670
MGO $1020

Singapore (delivered indications 27-2)

WTI is bullish with +$0.59. Singapore paper is bearish with -$2.70 for 180cst and -$2.50 for 380cst for Mar, and for Apr 180 cst -$2.15 and 380cst -$2.50 with MGO contracts being bearish Mar -$0.05 and Apr -$0.07. The cargo market is bearish with 180 cst -$4.52, 380cst -$4.69and MGO -$0.93.

Singapore bunker fuel oil prices weakened yesterday assessed $4.5-5.0 down from previous days close. Suppliers reported average demand and good product avails. Bunker fuel oil swaps lost app.$5/mt along the curve for Rtdam 3.5%FOB and a dollar more for Singapore papers.

380cst $615
180cst $628
MGO $940

Fujairah (delivered indications 27-2)

380cst $610
180cst $643
MGO $988

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $587
(1.0 %) : $637
180cst: $617
MGO 0.1%S: $879