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WTI oil futures pushed higher this morning, amid speculation weekly supply data due later in the session will show U.S. crude inventories fell for the first time in eight weeks last week.

Oil futures hesitated in electronic morning trading on Tuesday; the day after the gasoil front month had dropped to a 6.5 year low, but rebounded at the beginning of European trading when traders covered some of their short positions. The rebound of the WTI contract off its 40.00 USD key support, and technical buying signals the Stochastic indicator had triggered, helped prices up in a fundamentally still bearish market where the long-term downtrends, limited by the 7-day moving average lines, are still intact. Around noon the expectations of a build in U.S. crude stocks and Genscape's announcement of a 1.2 mb/d build in Cushing reserves gained the upper hand in the absence of any directive news and erased oil's earlier gains. The bearish market sentiment gathered further momentum when some analysts said that oil prices would stay at their current low level for much longer or could even decline further. When the API, after office hours at 10.30 p.m., announced a surprise draw in U.S. crude stocks, market participants covered some of their short positions. Oil futures at ICE and NYMEX could therefore not extend their gains but rebounded from their day's lows towards the end of the session and settled higher in London and New York.

ICE Gasoil contract for November delivery settled at 423.25 USD on Tuesday, this is 8.25 USD above Monday's settlement. With some 69.200 deals the traded volume (front month) was above average.

The Stochastic's bullish potential meanwhile has been widely absorbed, its two lines not diverging any more. Still, as they are not yet converging, they still have some bullish impact left. As long as the futures are keeping below their 7-day moving average lines the long-term downtrends are still intact. Technical buying pressure has thus eased, the more as prices at ICE and NYMEX climbed back above their lower Bollinger bands. If the RSI and the Stochastic both are still at the oversold level, they have meanwhile changed direction and point upwards. In the absence of any fresh signals this morning we consider the technical constellation as neutral. The WTI still has a key support at 40.00 USD while the 7-day moving average serves as a resistance line between 41.90 and 42.00 USD.

U.S.

Nymex is above average: Oil futures are trading in a very narrow range in East-Asia but rose at the beginning of the European session this morning, breaching several resistance lines. The traded volume at NYMEX is well above average this morning while the volume of the January contract is already higher than that of the front month, the contract for December delivery expiring on Friday. Investors are waiting for the European financial and forex markets to open today and for the release in the afternoon of some U.S. indicators. They will also eye the official DoE report on U.S. petroleum stocks.

Forecast: Crude oil +2.0; Distillates -0.2; Gasoline -0.9 million barrels vs previous week.
API: Crude oil -0.5; Distillates -1.5; Gasoline +0.2 million barrels vs previous week.

Houston (ex-wharf indications 18-11)
380cst $200
180cst $296
MGO $452

New Orleans (ex-wharf indications 18-11)
380cst $214
180cst $259
MGO $447

Singapore (delivered indications 18-11)

Brent is losing with -$0.50 for December contracts. Singapore paper is down with -$5.00 for 180cst with -$4.25 for 380cst for Dec, and for Jan 180 cst -$6.20 and 380cst with -$6.45 with MGO contracts Dec with -$0.28 and in Jan with -$0.32. The cargo market is bearish with 180cst +$1.83, 380cst with +$2.98 and MGO with up +$0.05.

380cst $216
180cst $231
MGO $418

Fujairah (delivered indications 18-11)

380cst $222
180cst $260
MGO $605

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $188
MGO 0.1%S: $398