---

Crude prices eased in Asia on Wednesday on expectations for an eleventh straight weekly increase in U.S. domestic crude stockpiles after industry data reported bearish figures.

Oil futures initially showed a softer tendency on Tuesday morning as the technical constellation indicated selling signals. The announcement of Russia's foreign minister that Russian troops would withdraw from the regions near the Ukrainian border and Libyan rebels saying that occupied export terminals in the east of Libya might soon be unblocked, weakened two important bullish factors. Only Brent fell through some short-term supports until the early afternoon, however. Gasoil remained above its first support. Since the purchasing manager indeces for the Eurozone and the US manufacturing sector fell short of expectations yesterday, selling pressure increased. At last, oil futures sharply declined in late trade dropping below their short-term uptrends. The RSI thus confirmed the selling signal of the stochastic indicator triggering a technical sell-off. The front months of the Gasoil and the Brent contract thus hit a nine- resp. five-month-low. The API's data on US oil inventories released last night took investors by surprise showing a massive draw in crude oil stocks. The decline at oil markets was only stopped when this bullish data came in. Oil futures thus saw a light counter-reaction last night.

ICE Gasoil contract for April delivery settled at 893.00 USD on Tuesday. This was -1.00 USD below Monday's settlement. With some 36,700 deals, the traded volume of the front month was below average.

The stochastic indicator and the RSI are still bearish after having given a selling signal yesterday. When oil futures broke below their short-term uptrends, further technical selling orders were generated and added to selling pressure. Quotations seized the downward potential generated by yesterday's selling signals. Thus, they have already spent most of their downward slack. Since the RSI and the stochastic indicator are still bearish, we assess the technical situation as bearish, however. Nevertheless, investors might cover some of their short positions this morning, before oil futures continue to test their downward potential.

U.S.

Nymex cooling: Oil prices pulled back from yesterday's lows in the early morning still supported by the API's bullish inventories data. The traded volume at NYMEX is slightly above average for this time of day. Investors are now eying the development at stock and forex markets waiting for the few economic data due today.

Forecasts: Crude oil +2.5; Distillates -0.7; Gasoline -2.0 million barrels vs previous week.
DOE: due out tonight.
API: Crude oil -5.8; Distillates -0.2; Gasoline +0.2 million barrels vs previous week.

Houston (ex-wharf indications 2-4)
380cst $596
180cst $698
MGO $990

New Orleans (ex-wharf indications 2-4)
380cst $627
180cst $666
MGO $993

Singapore (delivered indications 2-4)

WTI is bearish with -$1.75. Singapore paper is bearish with -$2.50 for 180cst and -$3.75 for 380cst for Apr, and for May 180 cst -$4.50 and 380cst -$5.00 with MGO contracts being bearish Apr -$1.26 and May -$1.26. The cargo market is also bearish with 180 cst -$6.94, 380cst -$5.47 and MGO-$0.05.

Demand picture continues to be weak for marine fuel in Singapore and ex-wharf 380cst fuel oil was heard to be traded at $590/MT, the lowest level in nearly nine month. The 380cst market is poor so despite reasonable demand for 180cst in the region it was dragged down by less demand for 380cst. This was reflected in the FO paper market were we now witness flat time-spread in the front on 180cst and contango in the front on 380cst a/m -1.00 and m/j -0.25.

380cst $595
180cst $610
MGO $920

Fujairah (delivered indications 2-4)

380cst $605
180cst $640
MGO $981

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $580
(1.0 %) : $650
180cst: $620
MGO 0.1%S: $865