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WTI oil futures fell below the $100-level this morning, as concerns over U.S. demand for oil and fuel products like gasoline drove prices lower.

Oil futures traded with a steadier tendency on Wednesday morning as the API's data on US oil inventories and the latest sanctions against Russia prompted investors to hedge bullish risks by increasing their long positions. Prices surpassed first short-term resistances and Gasoil broke above its short-term technical triangle. This buying cue wasn't enough, however, to make Gasoil rise above Tuesday's high and to make Brent exceed its resistance at 107.80 USD. Near these levels traders took profits as sufficient global supplies on the physical market are limiting the upside even though market fundamentals had briefly turned bullish. Moreover, the stochastic indicator remained bearish at ICE charts and investors avoided too large positions ahead of the release of the DOE's report on US oil stocks at 4.30 p.m.. At first, oil futures struggled to find a direction after the release of the DOE's data. However, they edged lower in the course of the late afternoon on the bearish impact of the builds in product inventories. Quotations only significantly slipped in late trade, after our submission deadline. Brent dropped below its key-support at 106.75 USD that limited the North Sea crude oil's side trend and WTI breached the psychological 100.00 USD marker. This added to technical selling pressure, which is why oil futures at ICE and NYMEX hit new lows at the time of settlement.

ICE Gasoil contract for August delivery settled at 893.25 USD on Wednesday, this is -0.75 USD below Tuesday's settlement. With some 25,500 deals the traded volume (front month) was far below average.

The stochastic indicator already gave its selling signal at the Brent chart yesterday, whereas at the WTI and the Gasoil charts it had already turned bearish days before. Therefore, there are no new technical cues from this indicator at the moment. Still, it remains slightly bearish as its lines keep drifting apart. Brent has meanwhile broken below its side trend and WTI has breached its support at 100.00 USD generating new technical selling cues. The sell-off that followed yesterday evening is likely to have already spent most of these cues and so technical selling pressure ebbed this morning. Brent's and WTI's break below their key-supports generated more downward potential. That is why we continue to assess the technical constellation as neutral to bearish. Yesterday's late decline might lead to some profit taking from speculative short positions (short covering) that would foster prices at ICE and NYMEX before the downward move continues.

U.S.

Nymex above avarage: Futures at ICE and NYMEX have seen a slight counter-reaction to yesterday's losses as market players covered some of their short positions. The first resistances have limited the rise, however. The traded volume at NYMEX is slightly above average for this time of day. Investors 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.

API: Crude oil -4.4; Distillates +0.5; Gasoline +0.1 million barrels vs previous week, refinery utilisation -0.7%; cushing -0.9.
DOE: Crude oil -3.7; Distillates +0.8; Gasoline +0.4 million barrels vs previous week.
Forecasts: Crude oil -1.0; Distillates +1.5; Gasoline +1.0 million barrels vs previous week.

Houston (ex-wharf indications 31-7)
380cst $587
180cst $671
MGO $963

New Orleans (ex-wharf indications 31-7)
380cst $595
180cst $668
MGO $968

Singapore (delivered indications 31-7)

WTI is down with -$2.28. Singapore paper is down with -$2.50 for 180cst and -$2.70 for 380cst for Aug, and for Sep 180 cst -$2.75 and 380cst with -$3.00 with MGO contracts Aug losing with -$1.31 and in Sep with -$0.97. The cargo market is losing with 180cst +$1.93, 380cst with +$0.82 and MGO with +$0.46.

The Singapore fuel oil prices gained nearly $2.0/mt during the Asian Platts window yesterday tracking the crude price. The delivered bunker premiums were firm ranging between +$9.5 and +$10.25 above cargo. Market is seeing some tightness in bunker grade 380cst.

380cst $599
180cst $608
MGO $885

Fujairah (delivered indications 31-7)

380cst $625
180cst $650
MGO $985

ARA (Amsterdam - Rotterdam - Antwerp)

(delivered indications 31-7)
380cst : $571
(1.0 %) : $586
180cst: $601
MGO 0.1%S: $864