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WTI oil futures wallowed near a two-month low this morning, 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.

Oil prices at ICE and NYMEX traded in a narrow range in European trading on Wednesday, investors staying cautious in a fundamentally bearish market that favoured more downside. The API's data on U.S. petroleum stocks weighed on prices as did news that a series of oil tankers were waiting to be unloaded off the U.S. gulf coast. Market participants take this piling up of tankers as a sign that U.S. storage capacities are becoming exhausted. The situation could get even worse with the arrival of ten more tankers from Iraq in the course of the next few days. At the beginning of the session in New York some traders chose to cover some of their short positions which took oil prices to their day highs in a market susceptible to price fluctuations due to the little trading volume at Veterans Day. But already short after the WTI contract which was affected the most by the tanker jam in the gulf of Mexico and the high U.S. crude stocks, tumbled and in its wake the other futures at ICE and NYMEX lost considerable ground. When prices fell below their Tuesday's lows a series of technically triggered selling orders accelerated oil's slide and futures eventually settled lower in London and New York.

ICE Gasoil contract for November delivery settled at 439.00 USD on Wednesday, this is 10.75 USD below Tuesday's settlement. With some 43,600 deals the traded volume (front month) was below average.

The Stochastic indicator is at the oversold level on all charts at ICE and NYMEX, signalling that a technical upward correction is due. But for such a correction clear buying signals are needed that have not yet been produced. The buying signal that the Stochastic triggered at the gasoil chart on Wednesday has even been absorbed again. However, should the indicator's two lines cross, a bullish signals would be triggered which could propel the futures as high as their 7-day moving average lines that are the upper limits of the downtrends at the WTI and the Brent chart. The lower Bollinger bands are seen as key supports. The WTI on Wednesday hit this support but was unable to breach it, while the Brent settled below this level and thus opened up more downside to prices within the existing downtrends. Today, market participants will focus on the fundamentals. Should bullish news hit the market and let prices rise the Stochastic indicator could trigger a technical buying signal. But as no fresh signals have been triggered yet we consider the technical constellation still as neutral this morning.

U.S.

Nymex is above average: Oil futures rebounded this morning in East-Asia but lost the ground regained in Globex electronic trading, investors being cautious in a market lacking direction the day after the U.S. holiday. The traded volume at NYMEX is above average this morning. Investors are waiting for the European financial and forex markets to open today, the release of some economic indicators, as well as for the OPEC's monthly energy report and the DoE's official figures on U.S. petroleum stocks, today at 5.00 p.m.

Forecast: Crude oil +1.1; Distillates -1.1; Gasoline -0.6 million barrels vs previous week.
API: Crude oil +6.3; Distillates -0.5; Gasoline -3.2 million barrels vs previous week.

Houston (ex-wharf indications 12-11)
380cst $219
180cst $288
MGO $479

New Orleans (ex-wharf indications 12-11)
380cst $235
180cst $288
MGO $470

Singapore (delivered indications 12-11)

Brent is losing with -$1.09 for December contracts. Singapore paper is down with -$6.60 for 180cst with -$6.95 for 380cst for Nov, and for Dec 180 cst -$6.85 and 380cst with -$7.25 with MGO contracts Nov down with -$0.98 and in Dec with -$0.96. The cargo market is bearish with 180cst -$3.53, 380cst with -$2.26 and MGO with up -$0.56.

380cst $238
180cst $247
MGO $446

Fujairah (delivered indications 12-11)

380cst $234
180cst $272
MGO $607

ARA (Amsterdam - Rotterdam - Antwerp)

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