---

U.S. crude oil prices fell to almost $40 a barrel this morning, its lowest since the global financial crisis of 2009, as supplies rose in North America and the Middle East, filling stockpiles to record levels.

On Wednesday morning, investors at oil markets waited for the release of the DOE's report later in the afternoon. That is why oil futures struggled to find direction. Prices at oil markets in London and New York were bolstered by shot-covering and the slightly bullish API data but the resistances at 42.70 USD WTI, 49.00 USD Brent and 475.50 USD Gasoil limited the upside. Particularly WTI tested its downward potential ahead of the release of the DOE's report as investors expected a rise in crude oil stocks in Cushing, Oklahoma. Moreover, news on Saudi Arabia's oil exports having surged in June weighed on crude oil futures in the early afternoon. When the DOE released its data on US oil inventories, futures slumped. Even though the report also contained some bullish factors, the surprise builds in US crude oil stocks bring back the topic of limited storage capacity in the USA. WTI's decline dragged the other futures down as well. Whilst Brent and Gasoil hit a 7 month-low, WTI dropped to the lowest level in 6.5 years - to 40.40 USD.

ICE Gasoil contract for September delivery settled at 463.00 USD on Wednesday, this is -8.00 USD below Tuesday's settlement. With some 78,400 deals the traded volume (front month) was far above average.

After having given a buying signal on Wednesday, the Stochastic indicator gave a selling signal at the WTI chart this morning. The RSI is still bullish at the Brent chart as it has exceeded 30%. Since oil futures at ICE have finally dropped below their sideways consolidation and WTI's downtrend is still intact, limited to the upside by the MA7, we assess the technical constellation as neutral to bearish this morning. For now, neither the Stochastic indicator nor the RSI are able to provide any fresh selling cues. That is why it will be crucial, whether oil futures drop below Wednesday's lows or not.

U.S.

Nymex on average: In Asian and electronic trading this morning, oil futures remained near the lows they had hit on Wednesday afternoon. The traded NYMEX volume is above average at this time of day. Market participants are now waiting for the European financial and forex markets to open as well as for the release of some economic indicators.

Forecast: Crude oil -1.1; Distillates +1.2; Gasoline -1.4 million barrels vs previous week.
DOE: Crude oil +2.6; Distillates +0.6; Gasoline -2.7 million barrels vs previous week.
API: Crude oil -2.3; Distillates +0.8; Gasoline -1.5 million barrels vs previous week.

Houston (ex-wharf indications 20-8)
380cst $234
180cst $386
MGO $481

New Orleans (ex-wharf indications 20-8)
380cst $254
180cst $314
MGO $476

Singapore (delivered indications 20-8)

WTI is bearish with -$2.47. Singapore paper is down with -$12.00. for 180cst with -$11.55 for 380cst for Sep, and for Oct 180 cst -$12.25 and 380cst with -$12.10 with MGO contracts Sep losing with -$2.00 and in Oct with -$1.93. The cargo market is bearish with 180cst -$0.30, 380cst with -$0.12 and MGO with +$0.61.

380cst $240
180cst $252
MGO $435

Fujairah (delivered indications 20-8)

380cst $249
180cst $289
MGO $599

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $233
MGO 0.1%S: $433