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WTI oil futures edged higher on Tuesday, as market players assessed demand prospects from the U.S., while awaiting new developments from Ukraine and the Middle East.

After Friday's losses, trading at oil markets remained subdued on Monday morning. The geopolitical risks regarding the hotspots in Ukraine and the Gaza Strip, where Israeli troops had started an offensive days ago, are still bolstering oil futures at ICE and NYMEX by boosting the riks premium. Still, theses crises didn't have any greater impact on oil supplies yesterday and so, their bullish effect is more theoretical. Yesterday, Libya announced the first oil exports from the Sharara oil field. Operations at the field had been restarted last week. However, Libya's total production declined compared to last week as bottlenecks in exports are still existing in other parts of the country. The global situation of supply and demand is still considered as bearish, however, this didn't bring more downward potential for oil markets as the geopolitical risk premium keeps supporting prices. Particularly WTI surged in late trade as market players renewedly expect that US crude oil inventories will show a decline. Since the WTI contract due in August is going to expire tonight, the rise particularly showed with this contract. Spreadbets added to this effect. Therefore, the spread between the Brent and the WTI contract narrowed to less than 5 USD. ICE futures eventually kept track of WTI's sharp rise settling with (smaller) gains, too.

ICE Gasoil contract for August delivery settled at 879.50 USD on Monday, this is -4.50 USD below Friday's settlement. With some 43,500 deals the traded volume (front month) was below average.

The RSI is neutral at all charts giving no new cues. The stochastic indicator is also still neutral at the ICE and at the NYMEX charts as its lines are converging. At the Brent chart the lines of the stochastic indicator have formally crossed but not sustainably enough to give a clearly bearish signal. That is why we also assess the indicator as neutral at this chart. Even though the stochastic indicator might give some selling signals in the course of the day, up to now, the technical constellation is neutral, see also technical analysis.

U.S.

Nymex on avarage: Oil futures tended to the upside in electronic trading this morning fostered by the expectations of more sanctions against Russia and of bullish US oil inventories data. The traded volume at NYMEX is clearly above average for this time of day since the WTI August contract is going to expire tonight and investors are adjusting their positions. Traders will eye the development at stock and forex markets today monitoring as well the situation in Iraq, Ukraine, Israel and Libya. They are also looking ahead to the economic indicators that are due today (see economic calendar).

Forecasts: Crude oil -2.8; Distillates +2.0; Gasoline +1.0 million barrels vs previous week.

Houston (ex-wharf indications 22-7)
380cst $588
180cst $673
MGO $969

New Orleans (ex-wharf indications 22-7)
380cst $595
180cst $667
MGO $972

Singapore (delivered indications 22-7)

WTI is up with +$1.31. Singapore paper is up with +$3.05 for 180cst and +$3.55 for 380cst for Aug, and for Sep 180 cst +$3.20 and 380cst with +$3.30 with MGO contracts being bullish in Aug with +$0.76 and in Sep with +$0.79. The cargo market is bearish with 180cst -$6.58, 380cst with -$6.29 and MGO with -$0.99.

The Singapore fuel oil prices fell more than $6.0 during the Asian Platts window yesterday tracking the weaker crude values. The delivered bunker premiums rose higher to an estimate of +$9.0 above cargo on lower outright prices and firm demand.

380cst $592
180cst $605
MGO $880

Fujairah (delivered indications 22-7)

380cst $605
180cst $637
MGO $982

ARA (Amsterdam - Rotterdam - Antwerp)

(delivered indications 18-7)
380cst : $578
(1.0 %) : $601
180cst: $618
MGO 0.1%S: $860