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Crude oil futures traded near multi-month lows this morning, as a disappointing HSBC preliminary reading of China's PMI for the month of August rekindled fears of a slowdown in the mainland.

The sharp decline at oil markets on Monday and the API's bullish inventories data released Tuesday night have prevented oil futures from extending their losses on Wednesday morning as investors still tended to cover their short positions. Although the market situation is still bearish, given the rise in Libya's and Iraq's output, and the technical constellation was rather pointing to a downward move as well, oil futures gained ground in the first half of the day. Brent failed to breach its resistance at 102.40 USD, however. In the course of the day there were no important economic indicators that might have provided fresh cues. Therefore, oil futures consolidated below their earlier highs. They remained rather volatile, though. Particularly the WTI September contract added to volatility. The contract expired yesterday evening. The DOE's data on US oil inventories released at 4.30 p.m. were bullish at first sight. But looking closer at the data, it lost this bullish note. Oil futures thus didn't extend their gains after the release of the data only gaining more ground after the release of the FOMC's meeting minutes. That is why futures settled near their intra-day highs.

ICE Gasoil contract for September delivery settled at 857.50 USD on Wednesday, this is +1.75 USD above Tuesday's settlement. With some 59,200 deals the traded volume (front month) was below average.

The stochastic indicator is already giving a buying signal at the Brent and the Gasoil chart after the lines of the indicator have renewedly crossed. However, the downtrends are still intact speaking against a sustainable price rally. At the WTI chart, the buying signals given at the ICE charts might be confirmed if the lines of the stochastic indicator cross here, too, and if the RSI surpasses 30%. Even though the buying signals at ICE indicate that the technical constellation is slightly bullish, the intact downtrends still prevent a sharper rise which is why we are regarding the technical constellation as neutral for the time being. If the buying signals are confirmed at the WTI charts, however, the technical constellation will turn clearly bullish. If the buying signals at ICE wane in the course of the day, the technical situation would turn slightly bearish again favoring a test of the long-time lows oil futures had hit at the beginning of this week.

U.S.

Nymex below avarage: The steadier dollar and the disappointing purchasing manager index out of China weighed on oil futures at ICE and NYMEX this morning. The traded volume at NYMEX is 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 a raft of economic indicators due today.

API: Crude oil -1.4; Distillates -0.6; Gasoline -2.1 million barrels vs previous week.
DOE: Crude oil -4.5; Distillates -1.0; Gasoline +0.6 million barrels vs previous week.
Forecasts: Crude oil -1.8; Distillates -0.3; Gasoline -1.7 million barrels vs previous week.

Houston (ex-wharf indications 21-8)
380cst $574
180cst $664
MGO $953

New Orleans (ex-wharf indications 21-8)
380cst $578
180cst $679
MGO $951

Singapore (delivered indications 21-8)

WTI is losing with -$0.37. Singapore paper is down with -$1.65 for 180cst and -$1.40 for 380cst for Sep, and for Oct 180 cst -$1.40 and 380cst with -$1.30 with MGO contracts Sep losing with -$0.70 and in Oct with -$0.68. The cargo market is gaining with 180cst +$2.44, 380cst with +$1.66 and MGO with +$0.53.

The Singapore fuel oil prices rebounded yesterday more than +$1.5 during the Asian Platts window tracking the firmer crude values. The delivered bunker premiums were around +$8.5 to +$9.0 above cargo prices.

380cst $587
180cst $599
MGO $860

Fujairah (delivered indications 21-8)

380cst $598
180cst $640
MGO $980

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $560
(1.0 %) : $569
180cst: $590
MGO 0.1%S: $828