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Crude oil futures slipped lower on this morning, after rising to a four-day high fuelled by a decline in U.S. stockpiles, as ample supply from the Middle East continued to weigh.

Oil futures at ICE and NYMEX hit their first resistance lines in electronic morning trading but failed to breach them. In the absence of technically driven buying signals traders tried the downside. Along with news from Libya where oil production most recently rose above 900.000 b/d Brent fell through its 96.40 dollar support, triggering a wave of technical selling in a market eyeing the release of the DoE's report. Brent fell to its lowest in two years and gasoil dropped to a record low last hit in January 2011. The decline was less steep at the NYMEX as investors expected the DoE to report a draw in crude oil stocks. Market volatility rose in late trading after the release of the data and oil prices climbed on the bullish report, the breach of the first resistance lines triggering buying signals of the Stochastic and the RSI in an oversold market that accelerated oil's rise.

ICE Gasoil contract for October delivery settled at 806.75 USD on Wednesday, this is 4.75 USD below Tuesday's settlement. With some 46,900 deals the traded volume (front month) was below average.

The Stochastic indicator triggered buying signals at all charts last night after its two lines had crossed. The signals were bolstered by the RSI breaching the 30 line at the Brent chart. Still, oil's strong rise was accompanied by extensive short covering which should have largely absorbed oil's upward potential. At the gasoil chart the Stochastic lines do not diverge any more so that the indicator has lost some of its bullish potential. Besides, long term uptrends at the ICE remain intact which opposes a strong and lasting upward correction. But because of Wednesday's buying signals we assess the technical constellation as somewhat bullish.

U.S.

Nymex on avarage: Oil prices at ICE and NYMEX were lower in Asia and electronic trading this morning, retreating from yesterday's highs but trading still within a narrow range. The traded volume at the NYMEX is about on average for this time of day. Market players will eye the development at stock and forex markets today. They will also monitor the situation in the geopolitical hotspots and today's economic indicators mainly in the U.S.

Forecasts: Crude oil +0.8; Distillates +0.4; Gasoline -0.3 million barrels vs previous week.
DOE: Crude oil -4.3; Distillates +0.8; Gasoline -0.4 million barrels vs previous week.
API: Crude oil -6.5; Distillates +3.0; Gasoline -0.1 million barrels vs previous week.

Houston (ex-wharf indications 25-9)
380cst $558
180cst $665
MGO $923

New Orleans (ex-wharf indications 25-9)
380cst $563
180cst $656
MGO $914

Singapore (delivered indications 25-9)

WTI is gaining with +$0.96 Singapore paper is up with +$1.25 for 180cst with +$1.30 for 380cst for Oct, and for Nov 180 cst +$1.00 and 380cst with +$1.25 with MGO contracts Oct gaining with +$0.04 and in Nov with +$0.03. The cargo market is losing with 180cst -$1.42, 380cst losing with -$1.55 and MGO losing with -$0.74.

The Singapore fuel oil prices were trading around parity during the Asian Platts window. Market fundamentals remained fairly stable with firmer demand on lower outright prices. The delivered bunker premiums were hovering around +$8.5 above cargo prices.

380cst $563
180cst $577
MGO $814

Fujairah (delivered indications 25-9)

380cst $583
180cst $627
MGO $978

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $543
(1.0 %) : $551
MGO 0.1%S: $791