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West Texas Intermediate oil futures edged higher this morning, as market players awaited key U.S. weekly supply data to gauge the strength of oil demand from the world’s largest consumer.

Traders in Great Britain and the USA returned to their desks on Tuesday after a prolonged weekend. Oil futures pared the losses they had marked on Monday in early Tuesday morning trading but by noon, they saw some profit taking again. Whilst the heavy fighting in the east of Ukraine and the decline in Libya's oil output (to about 160,000 bpd) supported prices, the technical constellation turned bearish in the course of the day favouring tests of the downside. Losses were limited near Monday's lows, however. Oil futures failed to break below these levels and so traders slightly increased their long positions again. In the afternoon, oil markets took a roller-coaster-ride as decisive cues were lacking. The economic indicators released in the USA largely came in better than expected but didn't justify a sustainable rise, the more so as traders were already eying this week's data on US oil inventories and figures on demand. These figures are important at the beginning of the summer season, when demand usually surges. The summer season, resp. the "driving season" traditionally starts with Memorial Day, which was celebrated in the USA on Monday. In all, oil markets remained on a high level on Tuesday, struggling to find a clear direction and finally concluding the session with small losses.

ICE Gasoil contract for June delivery settled at 912.00 dollars on Tuesday. This was +2.75 USD above Friday's settlement. With some 53,000 deals, the traded volume (front month) was about on average.

The selling signal of the stochastic indicator isn't really new anymore but the indicator stays bearish at ICE and NYMEX charts favouring tests of the downside. The RSI climbed back above 70% at the Brent chart and has thus lost the bearish influence it showed yesterday. If the indicator renewedly drops below this line, the technical selling pressure would increase again. Brent yesterday breached a support that limited its uptrend. If the contract also falls below 109.80 USD and 109.55 USD sustainably, the uptrend will be broken. This might trigger a technical counter reaction and profit taking from long positions. Until then, we assess the technical constellation as only slightly bearish, however.

U.S.

Nymex below average: Oil markets still don't show any clear direction this morning, with futures staying above Tuesday's lows. The traded volume at NYMEX is below average at this time of day. Market players are now eying stock and forex markets, waiting for news regarding Ukraine and Libya. Moreover, they are looking ahead to the release of some economic indicators.

Forecasts: Crude oil +0.3; Distillates -0.2; Gasoline +0.3 million barrels vs previous week.

Houston (ex-wharf indications 28-5)
380cst $607
180cst $702
MGO $993

New Orleans (ex-wharf indications 28-5)
380cst $610
180cst $689
MGO $996

Singapore (delivered indications 28-5)

WTI is up with +$0.88. Singapore paper is down with -$3.25 for 180cst and -$2.15 for 380cst for Jun, and for Jul 180 cst -$3.50 and 380cst with -$1.50 with MGO contracts being bearish in Jun with -$0.38 and in Jul with -$0.39. The cargo market is bearish with 180 cst -$0.54, 380cst with -$0.55 and MGO is up with +$0.69.

The Singapore fuel oil prices slipped only -$0.5 during the Asian Platts window yesterday. The delivered bunker premiums were seen between +$3.5 to +$5.0 above cargo prices. Bunker fuel oil swaps lost nearly $3/mt at the front of the forward curve for both Rotterdam and Singapore papers. The backend was slightly stronger with Cal15 papers assessed app. $1.5/mt down vs previous close.

380cst $606
180cst $621
MGO $920

Fujairah (delivered indications 28-5)

380cst $614
180cst $648
MGO $985

ARA (Amsterdam - Rotterdam - Antwerp)

380cst : $585
(1.0 %) : $649
180cst: $625
MGO 0.1%S: $883