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Crude oil futures were lower this morning, as investors locked in gains from a rally which took prices 19% higher over the past four sessions.

Oil futures at ICE and NYMEX already tested their first resistances on Tuesday morning after the strong increase on Friday and Monday. Technical analysis supported the upward movement and that's why oil futures were able to breach their Monday's lows already at midday. Therefore, technical analysis became bullish again triggering further stop loss buying orders of short positions (short covering). Oil futures consolidated on a high level after their increase from Tuesday morning due to lacking news. The strike at US oil refineries developed a supporting influence for oil product futures and even the weaker dollar caused a stronger buying interest for traders outside the United States as in dollar negotiated futures become cheaper for those traders in case of a weak US currency. The combination with the bullish technical constellation and the market players' fear to miss the moment when futures build a bottom triggered again some short covering in late trading. An additional technical buying signal was caused when WTI breached its interim high from January at 51.75 USD. Due to this buying signal, other futures were able to breach their so far day highs as well. Technical increase was partly absorbed again during the night. The US oil inventory report as per API registered increases in US crude oil and oil product stocks and is to be interpreted as bearish, therefore. But nevertheless, futures settled on a relatively high level on Tuesday evening in London and New York.

ICE Gasoil contract for February delivery settled at 536.75 USD on Tuesday, this is 24.50 USD above Monday's settlement. With some 46,000 deals the traded volume (front month) was below average.

Oil futures at ICE and NYMEX breached several important resistances within the last few days generating some upward potential which they were able to utilise. The stochastic indicator's buying signals are already a few days old and already lost their influence as the indicator's lines already converge again. The stochastic indicator and the RSI mark at the oversold level which encouraged upward corrections. But the corresponding bearish signals are missing which only will be triggered if the lines of the stochastic indicator sustainably cross and/or the RSI drops below the 70 line. Therefore, we consider the technical constellation as neutral this morning.

U.S.

Nymex above average: Oil futures returned from their late Tuesday's highs due to the API figures but stay strong, nevertheless. The traded volume at NYMEX is far above average at this time of the day. Market players are waiting for the European financial and the forex markets to open and the economic indicators which are to be released today and for the DOE data which is to be released this afternoon at 4.30 pm.

Forecast: Crude oil +3.8; Distillates -2.0; Gasoline +1.2 million barrels vs previous week.
API: Crude oil +6.1; Distillates +0.3; Gasoline +2.0 million barrels vs previous week.

Houston (ex-wharf indications 4-2)
380cst $297
180cst $379
MGO $596

New Orleans (ex-wharf indications 4-2)
380cst $303
180cst $359

Singapore (delivered indications 4-2)

WTI is gaining with +$1.73. Singapore paper is up with +$16.20 for 180cst with +$16.50 for 380cst for Feb, and for Mar 180 cst +$15.00 and 380cst with +$15.35 with MGO contracts Feb bullish with +$2.60 and in Mar with +$2.26. The cargo market is bullish with 180cst +$23.00, 380cst with +$23.20 and MGO with +$3.76.

380cst $329
180cst $344
MGO $527

Fujairah (delivered indications 4-2)

380cst $327
180cst $340
MGO $809

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $303
MGO 0.1%S: $526