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Oil futures held near the previous session's five-year lows this morning as ongoing concerns over a glut in global supplies weighed.

Further downward potential was to be seen at the oil market on Wednesday morning. The bearish EIA report and the US oil inventory data as per API weighed on the futures price level. Down tests were expected while the market players caution before the release of the official DOE data in the early afternoon was obvious. Selling pressure predominated after the OPEC released its monthly report with a bearish market perspective. Thus, all prices dropped to 5-year-lows. The DOE's report strengthened the downward movement by its considerable increases in crude oil stocks and oil product stockpiles. Short covering, which thwarted the price drop was to be seen in late trading after a price loss of about 3.00 USD at the Brent chart and about 25.00 USD at the Gasoil chart. Kuwait announced price reductions in the evening like Saudi Arabia and the Iran already did as well. That's why general selling pressure stays.

ICE Gasoil contract for December delivery settled at 581.75 USD on Wednesday, this is 22.25 below Tuesday's settlement. With some 58,800 deals the traded volume (front month) was about on average.

The stochastic indicator at the Gasoil chart stays slightly bullish today after its indicator's lines already crossed yesterday. The stochastic indicator might be blurred due to the stronger expected influence of short covering before the upcoming expiry of Gas oil’s front month this midday. Market players are still waiting for confirming signals at the Brent and the WTI chart which haven't been triggered yet. The stochastic indicator already indicates bullish signals but its lines didn't cross sustainably yet. The RSI at ICE and NYMEX didn't sustainably breach the 30 line neither so that no fresh signals were triggered. Due to the still intact downtrends and the lack of confirming buying signals we still consider the technical constellation as neutral this morning like we did yesterday.

U.S.

Nymex above avarage: Short covering follows yesterday's sharp losses so that futures currently return from their long-term lows. The traded volume at NYMEX is above average at this time of the day. Market players are waiting for the European financial and the forex markets to open and will eye the situation in the geopolitical hotspots and the series of economic indicators which are to be released today, and especially for the IEA's monthly report which is to be released on Friday.

Forecast: Crude oil -2.5; Distillates +1.9; Gasoline +2.6 million barrels vs previous week.
DOE: Crude oil +1.5; Distillates +5.6; Gasoline +8.2 million barrels vs previous week.
API: Crude oil +4.4; Distillates +4.3; Gasoline +6.7 million barrels vs previous week.

Houston (ex-wharf indications 11-12)
380cst $362
180cst $492
MGO $737

New Orleans (ex-wharf indications 11-12)
380cst $394
180cst $472
MGO $724

Singapore (delivered indications 11-12)

WTI is losing with -$1.37 Singapore paper is down with -$9.25 for 180cst with -$10.35 for 380cst for Dec, and for Jan 180 cst -$9.65 and 380cst with -$9.65 with MGO contracts Dec bearish with -$1.40 and in Jan with -$1.45. The cargo market is gaining with 180cst +$0.39, 380cst with +$0.10 and MGO with +$0.29.

380cst $380
180cst $402
MGO $610

Fujairah (delivered indications 11-12)

380cst $382
180cst $430
MGO $858

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $365
(1.0 %) : $375
MGO 0.1%S: $572