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Crude oil prices gained in early Asian trade this morning shrugging off bearish data overnight that revealed U.S. stockpiles shot up last week and sent the near-term contract to a one-month low, with the focus now on data from China on industrial output and retail sales.

Oil futures in London and New York were dominated by the slightly bearish technical constellation on Wednesday morning losing some ground at the beginning of European trade. Fears that Chinese growth will slow down also weighed on prices as figures released at the weekend showed that the world's second largest oil consumer's exports considerably declined in February (on year). Particularly ICE Gasoil futures slid yesterday morning as the stochastic indicator generated a new selling signal at the Gasoil chart that confirmed the bearish signal that was already existing for WTI. At first, oil futures decline was limited by Brent's key support at 107.80 dollars which was only breached in the early afternoon. Brent's break below this marker generated more downward potential but ahead of the release of the DOE's report on US oil inventories, investors avoided too large short positions. The DOE's data came in rather bullish for refined products but bearish for crude oil. Consequently, WTI kept track of its losses, with market players betting on a widening spread between Brent and WTI. Therefore, the Brent contract retraced some of its earlier losses. The DOE also announced later in the evening that it would release 5 million barrels of crude oil from strategic reserves as a test. This also favored the widening of the Brent-WTI-spread. In all, oil futures remained weaker until late in the evening. Only Brent remained a steadier buoyed by the spread bets. NYMEX Gasoline was bolstered by the sharp draw in US gasoline stocks.

ICE Gasoil contract for March delivery settled at 895.50 USD on Wednesday. This was -11.25 USD below Tuesday's settlement. With some 133,700 deals, the traded volume of the front month was far above average.

The bearish technical constellation has already waned this morning. The lines of the stochastic indicator are converging again at the WTI and the Gasoil chart losing their bearish impact, whereas the lines of the indicator are drifting apart at the Brent chart. Even though this hasn't generated a fresh buying signal yet, the stochastic indicator at the Brent chart can thus be interpreted as rather bullish. The European crude oil sort has already tested a key-resistance, that is the upper limit of its downtrend. Up to now this resistance stayed strong, however. There will only be a new bullish signal if Brent sustainably surpasses this line. If the resistance continues to prove strong, however, there might be some profit taking putting oil futures slightly under pressure. From a merely technical point of view, we thus assess the current situation as neutral.

U.S.

Nymex cooling: Oil prices edged higher in electronic morning trading today fostered by technical factors. The disappointing data out of China have capped gains, however, dampening euphoria at oil markets. However, traders are still waiting for data on China's industrial production which haven't been released yet. The figures on industrial production are considered the most important of the string of Chinese data. The traded volume at NYMEX is slightly above average for this time of day. Traders are now monitoring the development at stock and forex markets waiting for today's economic data and the development of the situation in the Ukraine and Libya.

API: Crude oil +2.6; Distillates -0.8; Gasoline -2.2 million barrels vs previous week.
DOE: Crude oil +6.2; Distillates -0.5; Gasoline -5.2 million barrels vs previous week.
Forecasts: Crude oil +1.9; Distillates -0.5; Gasoline -2.0 million barrels vs previous week.

Houston (ex-wharf indications 13-3)
380cst $596
180cst $676
MGO $998

New Orleans (ex-wharf indications 13-3)
380cst $646
180cst $679
MGO $1005

Singapore (delivered indications 13-3)

WTI is bearish with -$1.15. Singapore paper is bullish with +$3.50 for 180cst and +$3.50 for 380cst for Mar, and for Apr 180 cst +$2.65 and 380cst +0.25 with MGO contracts being bearish Mar -$0.48 and Apr -$0.70. The cargo market is bearish with 180 cst -$0.01, 380cst -$0.76 and MGO +$0.74.

The Singapore fuel oil prices extended price weakness by app.$1/mt during the Asian Platts window. The fuel oil cracks continued to strengthen as fuel oil was supported despite weaker crude prices. The delivered bunker premiums remained around $4.5/mt. This morning both markets are trading slightly higher.

380cst $602
180cst $614
MGO $918

Fujairah (delivered indications 13-3)

380cst $605
180cst $640
MGO $982

ARA (Amsterdam - Rotterdam - Antwerp)

A lot of 380 LSFO avails problems in whole of ARA. Most of the suppliers are only able to offer from 9th onwards.
Indications for delivered bunkers:
380cst : $578
(1.0 %) : $648
180cst: $608
MGO 0.1%S: $870