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Crude oil futures rebounded from three-month lows struck in the previous session this morning, after data showed that China’s economy grew more than expected in the second quarter.

Futures at ICE and NYMEX had already kept track of the slightly bearish technical constellation on Tuesday morning approaching Monday's lows and thus testing their downward potential. Several short-term supports were breached. Moreover, the stochastic indicator at the ICE charts confirmed the technical selling signal at the WTI chart so selling pressure increased in the course of the day. Economic data released on Tuesday largely disappointed expectations but the supports at 100.00 USD WTI and at 881.25 USD Gasoil initially limited profit taking. When the rising selling pressure sent oil futures even below these markers, technical selling orders were automatically triggered accelerating the decline. Gasoil eventually dropped to the lowest level since June 2013 whereas Brent hit a new 3-month-low. WTI fell to the lowest level in 2 months. The downward move was favoured by reports from Libya saying that the country's oil output had increased to more than 550,000 bpd and from Vienna, where the nuke talks were taking place. The dollar was able to advance Tuesday afternoon on Fed-chairwoman statement in front of the US Congress. Dollar-denominated oil thus got more expensive for investors outside the USA, adding to pressure on oil markets. The sharp and in part merely technical downward reaction was slightly corrected in late trade, however. Oil futures regained ground, pulling back from their lows even before the release of the rather bullish API's data on US oil inventories.

ICE Gasoil contract for August delivery settled at 873.50 USD on Tuesday, this is -9.75 USD below Monday's settlement. With some 82,300 deals the traded volume (front month) was far above average.

Tuesday afternoon, the stochastic indicator gave a selling signal favouring the sharp decline in oil futures. Meanwhile, the indicator has turned bullish, however. The black line has renewedly exceeded the red line. This is pointing to a test of the upside.. The steep downtrends are still intact, though. They are likely to cap the upward potential. Formally, we assess the technical perspective as slightly bullish, however, due to the stochastic indicator. The resistances of the trends will be crucial for more upward potential that might result from this constellation.

U.S.

Nymex on avarage: In early morning trade, futures at ICE and NYMEX kept track of the gains they had marked yesterday evening. They were fostered by positive economic data out of China and the API's bullish data on US oil stocks. The traded volume at NYMEX is on average for this time of day. Market players will monitor stock and forex markets today keeping a close eye on the developments in Iraq, Ukraine and Libya. They will also wait for today's economic indicators and the DOE's report due at 4.30 p.m. this afternoon.

API: Crude oil -4.8; Distillates +1.3; Gasoline -1.6 million barrels vs previous week.
Forecasts: Crude oil -2.5; Distillates +2.0; Gasoline +0.9 million barrels vs previous week.

Houston (ex-wharf indications 16-7)
380cst $583
180cst $681
MGO $974

New Orleans (ex-wharf indications 16-7)
380cst $591
180cst $648
MGO $970

Singapore (delivered indications 16-7)

WTI is down with -$0.18. Singapore paper is up with +$1.25 for 180cst and +$1.75 for 380cst for Aug, and for Sep 180 cst +$1.05 and 380cst with +$0.75 with MGO contracts being bearish in Aug with -$0.51 and in Sep with -$0.47. The cargo market is bullish with 180cst -$0.27, 380cst with +$0.51 and MGO with +$0.08.

The Singapore fuel oil prices managed to stay on the same levels ranging between -$0.25 to +$0.5 during the Asian Platts window yesterday. The Asian fuel oil crack continued to narrow as fuel oil values lagged the plunging crude prices. The delivered bunker premiums were seen between $5.5 and $7.5 above cargo. Bunker fuel oil swaps lost a limited $1.5/mt at the front of the forward curve (due to a strong crack) both for Rotterdam and Singapore papers. The backend of the curve, on the other hand, gained up to $3/mt for Cal15 erasing nearly all backwardation.

380cst $590
180cst $606
MGO $882

Fujairah (delivered indications 16-7)

380cst $602
180cst $633
MGO $982

ARA (Amsterdam - Rotterdam - Antwerp)

380cst : $573
(1.0 %) : $604
180cst: $613
MGO 0.1%S: $843