---

Oil prices slipped below $50 a barrel this morning after weak Japanese data sounded alarm bells over
the prospects for global growth, outweighing the bullish impact of a bigger-than-expected decline in U.S. crude oil stocks.

In spite of the slightly bearish technical constellation, market participants on this and that side of the Atlantic tended to cover their short-positions on Wednesday morning. The API's bullish data on US oil inventories released Tuesday night fostered oil prices. After oil futures had exceeded the first short-term resistances in the course of the day, the technical constellation slowly turned from slightly bearish to bullish, providing some buying signals. The wild gyrations of the euro/dollar only marginally affected oil prices in London and New York, where market players were waiting for the DOE's report on US petroleum stocks. Ahead of the FOMC's meeting results which are to be announced this evening, financial markets were extremely volatile. After the release of the DOE's data on US oil inventories, oil prices breached further resistances. Even though the DOE's report also contained bearish components, traders focused on the bullish aspects regarding crude oil inventories. This triggered a price rally in the evening. WTI took the lead, pulling the other contracts higher as well. Oil futures thus settled with new highs.

ICE Gasoil contract for October delivery settled at 477.00 USD on Wednesday, this is +20.00 USD above Tuesday's settlement. With some 88,200 deals the traded volume (front month) was far above average.

The MA7 and 21 didn't provide confirming selling signals on Wednesday. The technical constellation even turned bullish after Wednesday's price increase. The Stochastic indicator is bullish as it gave buying signals at the Brent and the Gasoil charts. Moreover, oil prices broke above the resistances of the short-term downtrends. They also exceeded the MA7 and the MA21, generating fresh upward potential. From a merely technical stance, the situation is thus bullish at the moment, favouring further upward moves.

U.S.

Nymex : Oil futures remained range bound in Asian and electronic trading this morning. The bullish factors of the DOE's data are still outweighing the bearish aspects. Investors are waiting for the European financial and forex markets to open and for a raft of economic indicators that are on the agenda today. They are also closely eying the results of the FOMC's meeting which will be announced this evening.

Forecast: Crude oil +1.1; Distillates +0.9; Gasoline -0.2 million barrels vs previous week.
DOE: Crude oil -2.1; Distillates +3.1; Gasoline +2.8 million barrels vs previous week.
API: Crude oil -3.1; Distillates +3.1; Gasoline +0.5 million barrels vs previous week.

Houston (ex-wharf indications 17-9)
380cst $226
180cst $283
MGO $485

New Orleans (ex-wharf indications 17-9)
380cst $235
180cst $292
MGO $467

Singapore (delivered indications 17-9)

WTI is bullish with +$1.08. Singapore paper is up with +$5.70 for 180cst with +$6.55 for 380cst for Oct, and for Nov 180 cst +$5.25 and 380cst with +$6.75 with MGO contracts Oct gaining with +$1.17 and in Nov with +$1.24. The cargo market is bullish with 180cst +$5.23, 380cst with +$4.42 and MGO with +$0.27.

380cst $230
180cst $239
MGO $440

Fujairah (delivered indications 17-9)

380cst $238
180cst $259
MGO $549

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $228
MGO 0.1%S: $403