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Crude oil futures traded near multi-month lows this morning, as ongoing concerns over a glut in world markets continued to drive down prices.

Oil prices at ICE in NYMEX lost ground in European trading hours on Tuesday on bearish fundamentals and technically driven selling orders. When the supports at 46,65 USD (WTI), at 52,45 USD (Brent) and at 480.00 USD (gasoil) proved strong, limiting oil's downside, prices rebounded and consolidated in a quiet market without direction in the absence of any important news. Short before settlement at the ICE oil prices jumped, obviously driven by some short covering as oil's downside was limited yesterday. According to the analyst at LPS Partners, buying orders placed for Brent short before the release of the Platts prices which coincides with the settlement of ICE gasoil have driven the oil complex. The rise tempted the Stochastic indicator to trigger buying signals at the gasoil and the WTI chart which accelerated oil's rise. Yet, in the absence of any bullish fundamentals to justify the price increase and in a market waiting for the release of the API's report on U.S. oils stocks prices retreated again from their day's highs. The bearish report of the API had little influence on the oil complex in late trading so that the futures settled slightly higher in London and New York.

ICE Gasoil contract for August delivery settled at 495.50 USD on Tuesday, this is 5.25 USD above Monday's settlement. With some 62,100 deals the traded volume (front month) was above average.

The technical constellation has meanwhile changed, the stochastic indicator having triggered a buying signal at the gasoil and the WTI chart when its two lines crossed. Even if the indicator is considered bullish this morning it has not yet triggered such a signal at the Brent chart which would be necessary for prices to pursue their rise. The Stochastic's buying signals having already been partly absorbed by Tuesday's rally they will only have a limited influence on the market today. Should the indicator's lines also cross at the Brent chart prices could rise as high as the upper limits of the existing downtrends or even above. The 7-day moving average line could also be hit. We therefore assess the technical constellation as neutral to bullish this morning.

U.S.

Nymex above average: Oil futures are trading in a narrow range in Asia and Globex electronic trading this morning in a market looking for direction after Tuesday's late rise. While the technical constellation is slightly bullish market participants hesitate in view of the bearish API data. The traded volume at NYMEX is below average at this time of day. While there is a single U.S. indicator on the agenda today, investors are waiting for the European financial and forex markets to open, for the release of the DoE's report on U.S. petroleum inventories and for the result of the FOMC meeting being released after office hours.

Forecast: Crude oil ±0.0; Distillates +1.3; Gasoline ±0.0 million barrels vs previous week.
API: Crude oil -1.9; Distillates +4.3; Gasoline +1.3 million barrels vs previous week.

Houston (ex-wharf indications 29-7)
380cst $273
180cst $428
MGO $517

New Orleans (ex-wharf indications 29-7)
380cst $285
180cst $354
MGO $498

Singapore (delivered indications 29-7)

WTI is bullish with +$0.11. Singapore paper is down with -$2.50 for 180cst up with -$2.05 for 380cst for Aug, and for Sep 180 cst -$2.25 and 380cst with -$1.80 with MGO contracts Aug losing with +$0.20 and in Sep with -$0.16. The cargo market is bearish with 180cst -$9.94, 380cst with -$10.10 and MGO with -$1.88.

380cst $283
180cst $294
MGO $453

Fujairah (delivered indications 29-7)

380cst $296
180cst $323
MGO $686

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $268
MGO 0.1%S: $458