---

WTI oil futures traded near the lowest level in six years this morning, amid speculation weekly supply data due later in the session will show U.S. crude inventories rose to the highest level on record last week.

Oil futures at ICE and NYMEX declined on Tuesday morning weighed down mainly by the bearish market fundamentals. Even though the technical constellation was still neutral in the first half of the day, there was potential down to Monday's lows after short-covering - linked to the expiry of the April Brent contract - had initially limited losses. Since investors renewedly expect this week's data on US oil inventories to show record highs in crude oil stockpiles and particularly inventories in Cushing are to increase again significantly (Genscape), the bearish factors predominated the market even without fresh technical signals. Whilst WTI dropped below Monday's low hitting a new 6-year-low, Brent and Gasoil stopped short near these markers failing to breach them. The economic data out of the USA released in the afternoon renewedly disappointed expectations but this wasn't enough to push oil prices further down. Late in the afternoon, traders rather covered some of their short positions in order to lock in some profits as the FOMC's meeting raised insecurity and the US crude oil contract with April delivery is going to expire on Friday. Last night, the API's report showed massive builds in US crude oil stockpiles, renewedly providing bearish cues for oil prices. So, WTI extended its lows overnight. Over all, Futures at ICE and NYMEX thus kept track of their losses finishing with considerable losses.

ICE Gasoil contract for April delivery settled at € 482.14 on Tuesday, this is -€ 0.71 below Monday's settlement. With some 67,200 deals the traded volume (front month) was above average.

The lines of the stochastic indicator have crossed at the Gasoil charts which is why the indicator is meanwhile giving a buying signal. A similar scenario seems imminent at the WTI and the Brent chart. Still, the lines of the indicator haven't crossed sustainably yet at these charts. Therefore, it is too early to speak of a buying signal here. If the stochastic indicator at the WTI and the Brent charts confirms the buying signal it showed at the Gasoil chart, a short-term upward correction might be triggered. However, the downtrends at ICE and NYMEX charts are still intact and so we are still assessing the technical constellation as neutral this morning. Tuesday's lows can be regarded as key-supports for Brent and Gasoil. Upward potential is limited by the resistances of the short-term trends.

U.S.

Nymex far above average: After Tuesday's short-covering oil futures at ICE didn't show any clear direction in electronic trading this morning. WTI has already headed for its 6-year-low again. The traded volume at NYMEX is far above average at this time of the day which is due to the imminent expiry of the April WTI contract. Market players are waiting for the European financial and the forex markets to open, for news concerning Iranian nuclear negotiations and for some economic indicators that are on the agenda today. Moreover, they are focusing on the DOE's data (3.30 p.m.) and the results of the FOMC's meeting.

Forecast: Crude oil +3.3; Distillates -0.5; Gasoline -0.9 million barrels vs previous week.
API: Crude oil +10.5; Distillates -0.3; Gasoline -0.6 million barrels vs previous week.

Houston (ex-wharf indications 18-3)
380cst $299
180cst $465
MGO $612

New Orleans (ex-wharf indications 18-3)
380cst $310
180cst $370
MGO $624

Singapore (delivered indications 18-3)

WTI is losing with -$0.07. Singapore paper is down with -$0.10 for 180cst with -$0.10 for 380cst for Mar, and for Apr 180 cst -$0.20 and 380cst with -$0.05 with MGO contracts Mar losing with -$0.02 and in Apr with -$0.04. The cargo market is bearish with 180cst -$1.20, 380cst with -$1.35 and MGO bearish with -$0.22.

380cst $306
180cst $326
MGO $518

Fujairah (delivered indications 18-3)

380cst $315
180cst $347
MGO $741

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $280
MGO 0.1%S: $498