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Crude oil futures steadied near their lowest level in months this morning, as concerns over ample global supplies and weak demand continued to weigh. Crude oil prices gained in Asia early this morning with a drop in industry figure for U.S. stocks.

After Monday's hefty losses that sent futures at ICE to 14-month lows, oil markets saw a light counter-reaction on Tuesday. Short coverings and the expectations of a draw in US crude oil and product stocks bolstered prices in the first half of the day. However, the second resistances already capped gains. With the open of NYMEX floor-trade, selling pressure increased in the afternoon. The bearish market situation and the steadier dollar (that had profited from uplifting data on the housing market) added to the downside. Particularly WTI with September delivery slumped. This is likely to have been due to the expiry of the front month contract tonight. Traders tried to liquidate their remaining long positions in the WTI September contract, opening them with contracts due later in the year. This bearish development thus only marginally affected the other futures and so Brent and Gasoil failed to break below their 14-month lows. The API's data largely matched expectations providing no significant new cues for oil markets. Thus, quotations settled nearly unchanged.

ICE Gasoil contract for September delivery settled at 855.75 USD on Tuesday, this is +2.25 USD above Monday's settlement. With some 48,800 deals the traded volume (front month) was below average.

The downtrends at the ICE charts remain intact. Brent confirmed its 14-month low near 101.05 and 101.10 USD yesterday. Thus a key-support has built at this level. At the Gasoil chart, the RSI and the stochastic indicator are not giving any new cues. Thus, they can be regarded as neutral. However, the lines of the stochastic indicator at the Brent chart have crossed giving a selling signal. At the WTI chart, the stochastic indicator is also bearish but we are still neglecting this chart as the due change in the WTI front month (tonight) has skewed the indicators at this chart in the past few days. The technical constellation is thus still neutral to bearish favoring a test of the downside. Brent might test its key-support. If it is able to sustainably break below this marker, a technical sell-off might be triggered. In this case, the technical constellation would turn completely bearish.

U.S.

Nymex below avarage: Overnight and this morning there were no decisive cues for oil markets. That is why futures at ICE and NYMEX didn't show any clear direction at the beginning of European trading. Only WTI was able to make up for some of the losses it marked yesterday. The traded volume at NYMEX is slightly below average for this time of day. Traders are now waiting for the development at stock and forex markets. They will also keep a close eye on the situation in Iraq, in the Ukraine and Libya and on the indicators due today. They are also looking ahead to the DOE's report on US oil inventories.

API: Crude oil -1.4; Distillates -0.6; Gasoline -2.1 million barrels vs previous week.
Forecasts: Crude oil -1.8; Distillates -0.6; Gasoline -2.1 million barrels vs previous week.

Houston (ex-wharf indications 20-8)
380cst $577
180cst $665
MGO $965

New Orleans (ex-wharf indications 20-8)
380cst $582
180cst $684
MGO $956

Singapore (delivered indications 20-8)

WTI is losing with -$1.03. Singapore paper is up with +$2.75 for 180cst and +$2.50 for 380cst for Sep, and for Oct 180 cst +$2.75 and 380cst with +$3.00 with MGO contracts Sep gaining with +$0.44 and in Oct with +$0.49. The cargo market is losing with 180cst -$1.14, 380cst with -$0.58 and MGO with -$0.27.

The Singapore fuel oil prices slipped app.-$1.0 during the Asian Platts window yesterday. The delivered bunker premiums maintained around +$8.5 to +$10.0 above cargo prices. Bunker fuel oil swaps gained app. $2/mt at the front of the forward curve while the backend was significantly stronger with cal15 papers assessed nearly $5/mt higher vs previous close.

380cst $585
180cst $597
MGO $860

Fujairah (delivered indications 20-8)

380cst $600
180cst $640
MGO $985

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $566
(1.0 %) : $573
180cst: $596
MGO 0.1%S: $833