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WTI oil futures edged higher on Wednesday, as investors awaited the release of weekly supply data out of the U.S. later in the session to gauge the strength of oil demand from the world’s largest consumer.

As expected, oil markets saw a counter-reaction to Monday's downward move on Tuesday morning as market participants renewedly hedged the dreaded bullish effect of new sanctions against Russia by increasing their long positions. Consequently, oil futures climbed surpassing some short-term resistances. Gains were capped, however, as investors still considered global oil markets as well-supplied. Thus, oil futures lacked momentum in the afternoon. Whilst Gasoil settled slightly higher, just above its 896.00 USD-resistance, Brent saw more profit taking and so the North Sea crude oil contract settled nearly unchanged after having temporarily tested its supports. As to WTI, particularly those contracts with sooner delivery retreated reflecting the expectations of a weakening US crude oil demand. The time-spread (price discount between contracts with sooner delivery and those with later delivery) thus narrowed and the backwardation slightly eased. A fire at a refinery in Kansas added to this development. Late Tuesday evening, the EU imposed new sanctions against Russia but market players seemed to have priced in the new sanctions, already. Therefore, reports on this topic didn't cause any larger moves at oil markets. The API's data on US oil inventories was released at 10.30 p.m. Tuesday night. Showing a sharper draw in US crude oil inventories, the figures were considered slightly bullish but failed to give markets a new direction.

ICE Gasoil contract for August delivery settled at 894.00 USD on Tuesday, this is +7.75 USD above Monday's settlement. With some 37,700 deals the traded volume (front month) was far below average.

The lines of the stochastic indicator have crossed at the Brent chart this morning giving a selling signal. At the WTI and the Gasoil chart, there haven't been any new signals yet, although the stochastic indicator can still be interpreted as bearish at the Gasoil chart. From a merely technical perspective, the constellation thus points to a test of supports, which is why we assess the technical constellation as neutral to bearish. Downward potential should remain limited, though, as a technical triangle has formed in the short-term at the Brent and Gasoil chart. If futures break above or below these triangles, there would be buying or selling cues. If oil futures leave these relatively tight ranges, Brent might even approach its key-resistance at 108.60 USD or its key-support at 106.75 USD. These two markers have defined Brent's side trend since two weeks by now.

U.S.

Nymex above avarage: Oil futures aren't showing any clear direction so far this morning as investors are still digesting the API's data and the new sanctions against Russia, whereas the technical constellation and the fact that markets are well-supplied don't speak for further tests of the upside. Nonetheless, oil prices have just breached their first resistances. The traded volume at NYMEX is slightly above average for this time of day. Traders are eying the development at stock and forex markets now. They will also keep monitoring the situation in Iraq, Ukraine, Israel and Libya and the economic indicators due today. Moreover, the DOE is going to release its data on US oil inventories at 4.30 p.m. this afternoon.

API: Crude oil -4.4; Distillates +0.5; Gasoline +0.1 million barrels vs previous week, refinery utilisation -0.7%; cushing -0.9.
Forecasts: Crude oil -1.0; Distillates +1.5; Gasoline +1.0 million barrels vs previous week.

Houston (ex-wharf indications 30-7)
380cst $588
180cst $672
MGO $966

New Orleans (ex-wharf indications 30-7)
380cst $595
180cst $669
MGO $970

Singapore (delivered indications 30-7)

WTI is down with -$0.23. Singapore paper is back up with +$1.85 for 180cst and +$1.15 for 380cst for Aug, and for Sep 180 cst +$0.60 and 380cst with +$0.90 with MGO contracts Aug gaining with +$0.45 and in Sep with +$0.45. The cargo market is losing with 180cst +$2.71, 380cst with +$1.88 and MGO with +$0.58.

The Singapore fuel oil prices opened the market up between $3.0 and $1.5 during the Asian Platts window yesterday after a long holiday weekend. The delivered bunker premiums were seen app.$8.5 above cargo prices.

380cst $595
180cst $605
MGO $885

Fujairah (delivered indications 30-7)

380cst $622
180cst $650
MGO $982

ARA (Amsterdam - Rotterdam - Antwerp)

(delivered indications 30-7)
380cst : $577
(1.0 %) : $592
180cst: $609
MGO 0.1%S: $866