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WTI oil futures bounced off a four-week low this morning, amid speculation weekly supply data due later in the session will show U.S. crude inventories fell at a faster pace than expected last week.

Oil futures in London and New York started consolidating on Wednesday morning after the strong price drop on Tuesday. Market players covered their short positions in this situation. Therefore, oil futures increased in the course of the morning, being supported by forex trading as the euro also increased. But the technical constellation at ICE and NYMEX stayed bearish, indicating further downward tests. The euro-dollar parity caused the change in direction at the oil market as the US dollar increased in the early afternoon and in dollar-negotiated oil futures got more expensive for traders outside the United States. When oil futures finally breached their Tuesday's lows, technical selling pressure increased. The euro compensated its losses in the late afternoon but technical downward movement at ICE and at the Brent chart continued. Therefore, oil futures kept losing ground until the night and finally settled near their Wednesday's lows.

ICE Gasoil contract for June delivery settled at 576.25 USD on Wednesday, this is -9.00 USD below Tuesday's settlement. With some deals the traded volume (front month) below average.

The stochastic indicator stays bearish after the crossing of its lines as they diverge already. The selling signals and the crossing of the moving averages were caused some days before. This is why most technical selling potential has already been realised. However, we consider the technical constellation as bearish this morning as there are fresh downward trends to be seen. Brent and Gasoil already dropped below their Bollinger bands and WTI is at its lower limit. Therefore, the technical constellation encourages a consolidation in the course of the morning. If oil futures breach their Wednesday's lows, downward pressure would considerably increase again.

U.S.

Nymex on average: Oil futures slightly increase this morning due to some short covering after the strong losses of Wednesday. The traded volume at NYMEX is about on average at this time of the day. Market players are waiting for the European financial and the forex markets to open and for the economic indicators that are on the agenda today. Investors will also closely eye the DOE's data on US oil inventories which will be released this afternoon at 5.00 pm.

Forecast: Crude oil -1.1; Distillates -1.0; Gasoline -1.0 million barrels vs previous week.
API: Crude oil +1.3; Gasoline -3.6 million barrels vs previous week.

Houston (ex-wharf indications 28-5)
380cst $335
180cst $469
MGO $646

New Orleans (ex-wharf indications 28-5)
380cst $346
180cst $404
MGO $602

Singapore (delivered indications 28-5)

WTI is losing with -$1.86. Singapore paper is losing with -$8.70 for 180cst with -$8.30 for 380cst for Jun, and for Jul 180 cst -$9.60 and 380cst with -$9.95 with MGO contracts Jun losing with -$1.43 and in Jul with -$1.45. The cargo market is bearish with 180cst -$1.47, 380cst with +$0.21 and MGO with -$0.88.

380cst $371
180cst $389
MGO $572

Fujairah (delivered indications 28-5)

380cst $376
180cst $396
MGO $732

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $328
MGO 0.1%S: $558