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Brent crude oil rose this morning as a drawdown in U.S. crude oil stocks outweighed the negative impact of weak economic manufacturing data from China.

The technical constellation remained bearish on Tuesday morning and so, oil futures tended to the downside at first. They thus kept moving up and down within their sideways consolidation. Investors took some profits after Monday's price increase. Moreover, equities renewedly weighed on oil prices as they are regarded as an indicator for economic growth and the correlating oil demand. The losses of the leading indices reinforced the bearish sentiment at oil markets. In the course of the day, the bearish bias thus predominated, sending oil futures lower. The expectations of a draw in US crude oil stockpiles in Cushing and nationwide limited the downside, though. Tuesday evening, oil futures saw a sharp upward correction as there were reports on the shut-down of two product pipelines in the east of the USA. Eventually, all futures rallied, with product futures taking the lead. Oil futures had already pared their losses before the release of the API's inventories report but buying pressure renewedly increased when the API's data showed a sharper than anticipated draw in US crude oil inventories.

ICE Gasoil contract for October delivery settled at 459.75 USD on Tuesday, this is -4.50 USD below Monday's settlement. With some 63,000 deals the traded volume (front month) was above average.

Since the lines of the Stochastic indicator have crossed at the Brent and the Gasoil chart, a buying signal has been generated. The 21-period MA remains a strong support for WTI. However, a technical triangle has formed at the WTI chart, keeping the contract tied to a narrow range. If WTI breaks above or below this triangle in the course of the day, oil futures will find a clear direction. The Stochastic indicator points to a buying signal at the WTI chart but its lines haven't crossed clearly enough yet. That is why the indicator hasn't given any clear buying signal yet.. Given the buying signals at the Brent and the Gasoil chart, the technical constellation can be considered slightly bullish but one has to keep in mind that the signals of the Stochastic indicator and the RSI are less reliable when oil futures are consolidating sideways. Consequently, we regard the technical constellation as neutral to bullish. If the Stochastic indicator gives a buying signal at the WTI chart, the situation would turn clearly bullish.

U.S.

Nymex above average : Oil futures pulled back from Tuesday's lows in Asian and electronic trading this morning as the economic data out of China had disappointed expectations. Meanwhile, however, prices have regained some ground. The traded volume at NYMEX is above average this morning. Market participants are now waiting for the European financial and forex markets to open, for the economic indicators which are on the agenda today, and for news on the shut-down pipelines in the USA. Investors are also looking ahead to the release of the DOE's data on US oil inventories which is due at 4.30 p.m.

Forecast: Crude oil -0.1; Distillates +1.4; Gasoline +1.0 million barrels vs previous week.
DOE: Crude oil -$3.7; Distillates ±0.0; Gasoline +2.2 million barrels vs previous week.

Houston (ex-wharf indications 23-9)
380cst $223
180cst $271
MGO $478

New Orleans (ex-wharf indications 23-9)
380cst $235
180cst $287
MGO $470

Singapore (delivered indications 23-9)

Brent is bouncing now after the recent losses +$1.31. Singapore paper gaining with +$11.00 for 180cst with +$10.25 for 380cst for Oct, and for Nov 180 cst +$10.45 and 380cst with +$10.25 with MGO contracts Oct Gaining with +$1.97 and in Nov with +$1.89. The cargo market is embracing the previous sell off yet to react to the bounce with 180cst -$1.16, 380cst with -$0.31 and MGO with +$0.20.

380cst $230
180cst $240
MGO $440

Fujairah (delivered indications 23-9)

380cst $233
180cst $253
MGO $519

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $223
MGO 0.1%S: $443