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WTI oil futures held near the lowest level in more than six years on Wednesday, as market participants looked ahead to fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of demand in the world’s largest oil consumer.

After Monday's sharp decline, oil futures slightly tended to the upside on Tuesday morning. Market participants took advantage of the 6.5-year-lows at ICE and NYMEX, covering their short positions and so oil futures surpassed first resistances in the course of the morning. This triggered more technical stop-loss buying orders. However, the downtrends remained intact, even though oil futures still had some potential up to the MA7 - the upper limits of the down trends. Whilst the expansive measures implemented by the Chinese central bank bolstered oil futures, the overall tendency remained soft as gains were rather caused by short-covering than by new bullish fundamentals. In the course of the evening, oil futures thus renewedly tended to the downside whereas WTI held comparatively steady. On the one hand, this was due to investors liquidating their spread bets (price differential between WTI and Brent) and on the other hand the API's bullish data on US oil inventories took market players by surprise. The API reported a massive draw in US crude oil stocks. This particularly fostered WTI. Eventually, oil futures stabilised near their long-term-lows, ending the day in the boundaries of their downtrends.

ICE Gasoil contract for September delivery settled at 430.25 USD on Tuesday, this is +1.75 USD above Monday's settlement. With some 60,000 deals the traded volume (front month) was above average.

The lines of the Stochastic indicator have crossed, giving a buying signal at the Brent and the WTI chart this morning. These signals favour a technical upward correction. However, the downtrends are still intact. WTI still has some potential up to the MA7. Even though the downtrends are still intact, some potential for an upward correction within the boundaries of these trends has developed. If oil futures break above these trends, a technical upward correction might be triggered. Due to the fact that the market is clearly oversold, this upward move might be considerable. The RSI hasn't given any buying signals yet but against the backdrop of the buying signals of the Stochastic indicator at the Brent and the WTI chart, we regard the technical constellation as slightly bullish this morning. WTI might find strong resistance near 40.00 USD.

U.S.

Nymex above average: The technical buying signals and the API's bullish data on US oil inventories have pushed oil futures slightly higher in electronic trading this morning. The traded NYMEX volume is far above average at this time of day. Investors are now waiting for the European financial and forex markets to open as well as for the release of today's economic indicators. Moreover, the DoE will release its data on US oil inventories this afternoon.

Forecast: Crude oil +0.3; Distillates +1.1; Gasoline -1.1 million barrels vs previous week.
API: Crude oil -7.3; Distillates +1.5; Gasoline +0.1 million barrels vs previous week.

Houston (ex-wharf indications 26-8)
380cst $209
180cst $334
MGO $468

New Orleans (ex-wharf indications 26-8)
380cst $222
180cst $274
MGO $444

Singapore (delivered indications 26-8)

WTI is bearish with -$0.09. Singapore paper is down with -$4.25. for 180cst with -$3.45 for 380cst for Sep, and for Oct 180 cst -$2.75 and 380cst with -$3.20 with MGO contracts Sep gaining with +$0.18 and in Oct with +$0.16. The cargo market is bearish with 180cst -$7.29, 380cst with -$6.72 and MGO with -$1.04.

380cst $204
180cst $211
MGO $401

Fujairah (delivered indications 26-8)

380cst $202
180cst $251
MGO $609

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $203
MGO 0.1%S: $403