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West Texas Intermediate oil futures edged lower this morning, as markets were jittery ahead of the European Central Bank's monthly policy statement later in the day as well as Friday’s highly anticipated U.S. nonfarm payrolls report.

At the beginning of trade on Wednesday morning oil futures at ICE and NYMEX stayed within a relatively narrow range between their first supports and their first resistances after having sharply declined on Tuesday. The outlook of an imminent resumption of Libyan crude oil exports and the technically slightly bearish constellation kept pressuring futures,however. Thus, oil prices saw a technical decline in the early afternoon. Futures breached several supports triggering further technical selling orders. The API's bullish data on US oil inventories has had no larger effect on prices Wednesday morning as investors assumed that the sharp draw in crude oil stockpiles was chiefly due to the temporary closure of the Houston Ship Channel. The economic data released in the USA later in the afternoon were seen as positive limiting the downside at oil markets. Moreover, investors were waiting for the DOE's data on US oil inventories. The DOE's report, released at 4.30 p.m., failed to give futures a new direction, however. Therefore, oil futures consolidated on a lower level in a rather volatile market yesterday evening. The spread between Brent and WTI has meanwhile significantly narrowed as the outlook of Libyan oil exports being resumed has a stronger effect on Brent than on WTI and as the US crude oil contract is still buoyed by a continuous decline in stockpiles in Cushing.

ICE Gasoil contract for April delivery settled at 873.50 USD on Wednesday. This was -19.50 USD below Tuesday's settlement. With some 34,500 deals, the traded volume of the front month was below average.

The RSI has lost its bearish influence by now. The indicator is moving in the lower part of neutral territory and might soon slip into oversold territory. The stochastic indicator is also losing some of its slightly bearish influence as its lines are slowly converging. Oil futures have declined for three consecutive days spending the bearish selling signals of the RSI and the stochastic indicators by sharply retreating on Tuesday and Wednesday. Therefore, we assess the technical situation as neutral this morning, the more so as market players are more likely to consolidate their positions ahead of the weekend and after the massive sell-off. Analysts expect that new bearish fundamentals are now more likely to be provided by market fundamentals, whereas a technical selling signal is only to be expected if oil futures fall below yesterday's lows.

U.S.

Nymex below average: Oil markets have seen a slight upward move in electronic trading this morning as some market players probably covered their speculative short positions ahead of the weekend. So far, there haven't been any decisive cues, the more so as Chinese purchasing manager indeces renewedly came in mixed. The traded volume at NYMEX is slightly below 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. The ECB's decisions on monetary policy will be in focus as much as Libya, where a statement on the negotiations is expected. But market players will also keep an eye on the tensions between Russia and the West.

Forecasts: Crude oil +2.5; Distillates -0.7; Gasoline -2.0 million barrels vs previous week.
DOE: Crude oil -2.4; Distillates +0.6; Gasoline -1.6 million barrels vs previous week.
API: Crude oil -5.8; Distillates -0.2; Gasoline +0.2 million barrels vs previous week.

Houston (ex-wharf indications 3-4)
380cst $591
180cst $699
MGO $989
New Orleans (ex-wharf indications 3-4)
380cst $622
180cst $665
MGO $992

Singapore (delivered indications 3-4)

WTI is dropping slightly with -$0.44. Singapore paper is bearish with -$3.35 for 180cst and -$3.50 for 380cst for Apr, and for May 180 cst -$4.00 and 380cst -$3.75 with MGO contracts being bearish Apr -$1.07 and May -$1.25. The cargo market is also bearish with 180 cst -$2.50, 380cst -$3.91 and MGO-$1.32.

Physical in Singapore is for now most affected by the drag down in crude. Wednesday the ex-wharf 380-cst marine fuel extended losses for the third straight session to a more than nine-month low. Singapore's bunker prices were unable to resist the slide in crude also because of sluggish demand for fuel oil in Asia amid voluminous supplies, particularly from the West, traders said. Fuel oil supplies scheduled to arrive this month in Asia from Western countries rise to 4.33 mln mt, shipping data show at least 26 tankers, including 8 VLCCs, booked to carry the fuel to Asia. This is up from 4.22 mln mt reported on March 26.

380cst $590
180cst $608
MGO $915

Fujairah (delivered indications 3-4)

380cst $603
180cst $638
MGO $983

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $582
(1.0 %) : $646
180cst: $622
MGO 0.1%S: $849