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Crude oil prices gained in Asia this morning as investors eyed a drop in U.S. stocks.

Oil futures started below Monday's lows on Tuesday morning, with market players waiting for fresh cues. The short-term upward potential the technical constellation had provided was largely spent but there was still some slack within the medium-term trend. Even though the expectation of an increase in US crude oil stockpiles weighed on prices, Russia's readiness to hold talks with OPEC bolstered prices, as did remarks made by high-ranking oil officials during a conference in London. The heads of IEA and OPEC said that the oil industry in 2015 would face the highest rate of cuts in investments on record. Oil futures thus broke above Monday's highs, with WTI heading for its key resistances. The bullish Stochastic indicator favoured tests of the upside. Moreover, the monthly energy report of the EIA came in bullish, providing further fundamental buying cues. At this point in time, the technical constellation already indicated that WTI might surge to 49.50 USD if it breached its resistance at 47.25 USD. When WTI surpassed this resistance, it unsurprisingly surged, causing a rally at ICE as NYMEX. Later in the evening, the API released its data on US oil inventories, which were considered clearly bullish, adding to buying pressure.

ICE Gasoil contract for October delivery settled at 486.25 USD on Tuesday, this is +12.25 USD above Monday's settlement. With some 57,100 deals the traded volume (front month) was below average.

WTI on Tuesday broke above a medium-term trend, generating more upward potential. The Stochastic indicator is neither providing any fresh cues at ICE nor at NYMEX charts but its lines are diverging which makes the indicator slightly bullish. However, the 7- and 21-period moving averages have meanwhile crossed, giving a buying signal. Oil futures in London and New York have already broken above Tuesday's highs in early electronic trading. This favours more tests of the upside. Even so, most of the bullish potential at the WTI chart should have been spent by now as the contract has found strong resistance between 49.30 and 49.50 USD. WTI futures might renewedly test their resistances but technical buying is only likely to set in when the resistance at 49.50 USD is breached. That is why we assess the technical constellation as only slightly bearish this morning. Still, the constellation would turn clearly bullish if WTI exceeds its key-resistance.

U.S.

Nymex above average : Fostered by the bullish cues that had already been provided on Tuesday, oil futures broke above Tuesday's highs overnight and in early electronic trading this morning. However, this hasn't led to a sharper price rally so far. The traded volume at NYMEX is far above average this morning. Market players are now waiting for the European financial and forex markets to open and for the release of the economic indicators which are due today. Moreover, the DOE's data on US petroleum stocks is due at 4.30 p.m.

Forecast: Crude oil +2.5; Distillates -0.6; Gasoline -0.1 million barrels vs previous week.
API: Crude oil -1.2; Distillates -2.9; Gasoline +4.7 million barrels vs previous week.

Houston (ex-wharf indications 7-10)
380cst $231
180cst $276
MGO $495

New Orleans (ex-wharf indications 7-10)
380cst $243
180cst $298
MGO $479

Singapore (delivered indications 7-10)

Brent is gaining with +$3.60. Singapore paper gaining with +$17.20 for 180cst with +$17.15 for 380cst for Oct, and for Nov 180 cst +$17.75 and 380cst with +$18.20 with MGO contracts Oct climbing with +$3.54 and in Nov with +$3.56. The cargo market is gaining with 180cst +$2.29, 380cst with +$0.95 and MGO with +$0.48.

380cst $246
180cst $261
MGO $463

Fujairah (delivered indications 7-10)

380cst $245
180cst $268
MGO $612

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $253
MGO 0.1%S: $469