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WTI oil futures traded near a four-week low this morning, as market players assessed demand prospects from the U.S. and the supply outlook in the Middle East.

Like in the last few days, there were but few breaking news for oil markets. Still, oil futures dropped below Monday's lows, which generated more technical downside. Market players stayed on the sidelines, however, in the course of the day as they were waiting for news from Libya. There was no actual confirmation of oil exports from Ras Lanuf and Es Sider being resumed. In the afternoon, oil futures briefly proved very volatile. WTI surged but failed to defend its gains. The sharp move was caused by a technical reaction triggered by spreadbets ahead of the release of US oil inventories data. In the course of the evening, the EIA's monthly energy report (published after our submission deadline) weighed on oil futures. News on oil production at Libya's largest oil field (Sharara) being restarted added to pressure. Therefore the bearish tendency renewedly prevailed in late trade. Oil prices dropped below several supports hitting new 4-week-lows. Only WTI was able to pare its losses overnight bolstered by spreadbets.

ICE Gasoil contract for July delivery settled at 887.50 USD on Tuesday, this is -8.75 USD below Monday's settlement. With some 38,200 deals the traded volume (front month) was below average.

Neither the stochastic indicator nor the RSI are giving any fresh signals at ICE this morning. They are still deeply in oversold territory. Only at the WTI chart the stochastic indicator generated a buying signal. However, this was also caused by yesterday evening's spreadbets. That is why we disregard this contract in our technical analysis this morning. At the Brent and the Gasoil chart, the lines of the stochastic indicator might soon cross but a buying signal will only be generated if the lines sustainably cross. As long as this is not the case, we assess the technical constellation as neutral. Like during the past few days, the downward potential is limited by the previous day's lows. New technical downward potential will only be generated if oil futures drop below these markers.

U.S.

Nymex below avarage: Oil futures at ICE and NYMEX hardly moved in the early morning consolidating on a low level near Tuesday's lows. The traded volume at NYMEX is below average for this time of day. Traders will eye stock and forex markets today monitoring the developments in Iraq, Ukraine, Iran and Libya. There are no important economic indicators due today but investors are eying the DOE's data on US oil inventories and the minutes of the FOMC's latest meeting.

Forecasts: Crude oil -2.8; Distillates +1.0; Gasoline -0.5 million barrels vs previous week.
API: Crude oil -1.7; Distillates -0.5; Gasoline +0.1 million barrels vs previous week.

Houston (ex-wharf indications 9-7)
380cst $596
180cst $676
MGO $981

New Orleans (ex-wharf indications 9-7)
380cst $606
180cst $658
MGO $982

Singapore (delivered indications 9-7)

WTI is down with -$0.06. Singapore paper is down with -$3.00 for 180cst and -$2.50 for 380cst for Jul, and for Aug 180 cst -$2.75 and 380cst with -$3.00 with MGO contracts being bearish in Jul with -$1.20 and in Aug with -$1.25. The cargo market is bearish with 180cst -$3.84, 380cst with -$3.41 and MGO with -$0.51.

The Singapore fuel oil prices similarly fell another $3.5 during the Asian Platts window yesterday following the general weakening in crude prices. The delivered bunker premiums remained unchanged at around +$5.0 above cargo. Visco spreads remained on the low side and closed at $4.77/mt yesterday. August is trading at app.$8.0/mt while forward prices are assessed in a range of $7.5-8.0/mt for the rest of the year.

380cst $595
180cst $610
MGO $890

Fujairah (delivered indications 9-7)

380cst $608
180cst $640
MGO $983

ARA (Amsterdam - Rotterdam - Antwerp)

380cst : $576
(1.0 %) : $617
180cst: $616
MGO 0.1%S: $864