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WTI oil futures fell sharply on Wednesday, amid speculation weekly supply data due later in the session will show U.S. crude inventories rose at a faster pace than expected last week.

The bearish market fundamentals put oil prices under pressure on Tuesday morning. Oil futures headed for Monday's lows against the backdrop of an expected rise in US crude oil inventories, reports on Iran having clinched deals with future buyers of its crude oil and doubts regarding China's economic growth. The Stochastic indicator generated a selling signal at the Gasoil chart, adding to selling pressure. However, the indicator didn't give off confirming selling signals at the Brent and WTI charts. Traders thus stayed on the sidelines, avoiding to significant short positions ahead of the release of the DOE's official report on US oil inventories and the meeting of OPEC members and important oil producers which aren't part of the cartel. Market players don't expect that the meeting will bring about output cuts. However, the mere possibility of such a measure prevented sharper losses as the outlook of an imminent reduction in oil production might make oil prices rally. The supports at 440.00 USD Gasoil and at 48.25 USD Brent thus remained strong. Although a recovery in equities briefly fostered oil prices late Tuesday afternoon, WTI remained weak, dragging the other contracts down again. The API's data on US oil stocks showed surprisingly sharp builds in US crude oil inventories whereas product stockpiles partly declined more significantly than expected. The data provided a bearish tone, which is why oil futures in London and New York settled near their lows.

ICE Gasoil contract for November delivery settled at 442.75 USD on Tuesday, this is -4.25 USD below Monday's settlement. With some 72,900 deals the traded volume (front month) was above average.

The Stochastic indicator at the Brent and WTI charts has meanwhile confirmed the selling signal it had already given off at the Gasoil chart on Tuesday. The indicator can thus be assessed as bearish. The lines of the 7-period and the 21-period moving averages have also crossed at the Brent chart, providing yet another bearish cue. So, the technical constellation is bearish this morning, pointing to further tests of the downside. If the lines of the 7-period and the 21-period moving averages sustainably cross at the WTI chart as well, there would be another selling signal, prompting investors to take even more profits. Tuesday's lows can be regarded as key supports today. If oil futures break below these marks, more Stochastic-driven downside might be generated. However, market players are likely to focus on the technical OPEC meeting and the release of the DOE's report on US oil inventories this Wednesday. The influence of the technical constellation might thus be refrained in the first half of the day.

U.S.

Nymex on average : Oil futures slightly recovered from Tuesday's losses in early morning trade as investors covered some of their short positions. However, prices have just lost ground again. The traded volume at NYMEX is on average this morning. Market players are now waiting for the European financial and forex markets to open, whereas there are no important economic indicators on the agenda. Moreover, they will eye the results of the OPEC meeting and the release of the DOE's data on US oil inventories, due at 4.30 p.m.

Forecast: Crude oil +3.5; Distillates -1.3; Gasoline -0.9 million barrels vs previous week.
API: Crude oil +7.1; Distillates -2.6; Gasoline -0.7 million barrels vs previous week.

Houston (ex-wharf indications 21-10)
380cst $221
180cst $286
MGO $480

New Orleans (ex-wharf indications 21-10)
380cst $233
180cst $285
MGO $470

Singapore (delivered indications 21-10)

Brent is gaining with +$0.01. Singapore paper gaining with +$1.75 for 180cst with +$1.00 for 380cst for Nov, and for Dec 180 cst +$1.75 and 380cst with +$0.75 with MGO contracts Nov down with -$0.25 and in Dec with -$0.30. The cargo market is losing with 180cst -$2.22, 380cst with -$0.84 and MGO with -$0.33.

380cst $229
180cst $243
MGO $431

Fujairah (delivered indications 21-10)

380cst $238
180cst $272
MGO $614

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $223
MGO 0.1%S: $408