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Crude oil futures rebounded this morning, as investors returned to the market to seek cheap valuations after prices fell more than 7% over the past two sessions.

The rather bearish technical guidelines which were already to be seen on Wednesday morning favoured the weak tendency at the oil market. Oil futures breached several short-term supports while market traders were waiting for the release of US oil inventory data as per DOE in the afternoon. The oil producers Iran, Kuwait and Iraq announced price reductions before for crude oil deliveries in March to Asia following Saudi Arabia which already reduced its prices. Therefore, especially crude oil contracts were put under pressure in the course of the afternoon especially as the RSI at the WTI chart dropped below the 70 line confirming the stochastic indicator's selling signals. Brent dropped below its mark at 55.00 USD due to the increase in technical selling pressure and even WTI considerably decreased falling below the 50.00 USD mark. US oil inventory data was bearish in general even though surprising decreases in distillate stocks were registered which limited profit taking of oil product futures at this time of trade. WTI and Brent rebounded from their supports at 48.00 USD and 54.00 USD and futures returned from their lows in late trading due to short covering.

ICE Gasoil contract for February delivery settled at 535.75 USD on Wednesday, this is 1.00 USD below Tuesday's settlement. With some 20,000 deals the traded volume (front month) was far below average.

After the stochastic indicator's selling signal, even the RSI at the Brent and WTI chart gave a bearish signal by dropping below the 70 line. The stochastic indicator's technical guidelines and the RSI indicate further downward tests while the RSI at the Gasoil chart still marks above the 70 line. If it confirms the selling signal of the other indicators and/or futures breach their Wednesday's lows technical selling pressure might increase again. The upcoming expiry of Brent's and Gasoil's front month could favor short covering which would mitigate the currently bearish technical constellation.

U.S.

Nymex above average: Oil futures lost some ground in early European trading but rebounded from their first supports as they weren't able to breach them. 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, for news concerning strikes at US oil refineries and the economic indicators which are to be released today especially in the United States.

Forecast: Crude oil +3.5; Distillates +0.2; Gasoline +1.0 million barrels vs previous week.
DOE: Crude oil +4.9; Distillates -3.3; Gasoline +2.0 million barrels vs previous week.
API: Crude oil +1.6; Distillates +0.5; Gasoline +1.6 million barrels vs previous week.

Houston (ex-wharf indications 12-2)
380cst $333
180cst $379
MGO $644

New Orleans (ex-wharf indications 12-2)
380cst $348
180cst $370
MGO $627

Singapore (delivered indications 12-2)

WTI is losing with -$0.75. Singapore paper is up with +$1.75 for 180cst with +$1.50 for 380cst for Feb, and for Mar 180 cst +$2.00 and 380cst with +$1.75 with MGO contracts Feb bearish with -$0.27 and in Mar with -$0.28. The cargo market is bearish with 180cst -$1.99, 380cst with -$2.17 and MGO with -$0.38.

380cst $342
180cst $360
MGO $540

Fujairah (delivered indications 12-2)

380cst $345
180cst $362
MGO $758

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $299
MGO 0.1%S: $545