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Oil prices inched up this morning, but held near seven-year lows amid uncertainty about how quickly the global glut of crude is set to shrink.

There was but little technical downside for oil futures on Wednesday morning. The constellation pointed to a consolidation and some tests of the upside even though there hadn't been any fresh signals yet. In terms of market fundamentals the situation remained bearish, though, the more so as the EIA upwardly revised in its monthly energy report its own forecast for oversupplies in 2015 and 2016. That is why the bullish factors couldn't prevail. Market players thus increasingly doubted that oil prices would see an upward correction on Wednesday. Moreover, they already eyed the DOE's report on US oil inventories which was due at 4.30 p.m. in the afternoon. However, the data didn't provide any clear cues as product inventories increased and crude oil stockpiles showed a massive draw. Oil futures thus only briefly surged. In the evening, the bearish aspects (product stocks) prevailed as investors presumed that crude oil inventories had only been shifted. Eventually, oil futures hit fresh lows ending the day in the red.

ICE Gasoil contract for December delivery settled at 363.25 USD on Wednesday, this is -5.00 USD below Tuesday's settlement. With some 42,900 deals the traded volume (front month) was below average.

The bullish Spinning Top that was indicated on the WTI chart on Wednesday didn't materialize as the US crude oil contract settled below its opening level. However, the Stochastic indicator might give fresh buying signals this morning. Even though the lines of the indicator have already crossed at the Brent and the WTI charts, we only see a clear buying signal if the black line surpasses the red line by at least 3 points. If the Stochastic indicator really provides these buying signals, oil futures might eventually see a correction up to the 7-period moving average (at least). As long as they are lacking, however, the technical constellation remains neutral.

U.S.

Nymex is above average: Oil futures have gained some ground in Asia and in electronic trade this morning bolstered by short-covering and the API's data on US crude oil stocks. After having hit fresh 7-year lows on Tuesday, prices have thus started slightly in the black this Wednesday. The traded volume at NYMEX is above average this morning. Investors are waiting for the European financial and forex markets to open today as well as for the release of some economic indicators. They will also keep a close eye on the release of the DOE's report on US petroleum stockpiles which is due at 4.30 p.m.

Forecast: Crude oil +0.5; Distillates +1.3; Gasoline +1.4 million barrels vs previous week.
DOE: Crude oil -3.6; Distillates +5.0; Gasoline +0.8 million barrels vs previous week.
API: Crude oil -1.9; Distillates +5.6; Gasoline +2.7 million barrels vs previous week.

Houston (ex-wharf indications 10-12)
380cst $170
180cst $257
MGO $413

New Orleans (ex-wharf indications 10-12)
380cst $182
180cst $237
MGO $414

Singapore (delivered indications 10-12)

Brent is down with -$0.20 for January contracts. Singapore paper is slow to react with +$0.50 for 180cst with +$0.50 for 380cst for Dec, and for Jan 180 cst +$0.25 and 380cst with ±$0.00 with MGO contracts Dec with ±$0.00 and in Jan with +$0.04. The cargo market is down with 180cst -$1.57, 380cst with -$2.35 and MGO with -$0.47.

380cst $182
180cst $199
MGO $373

Fujairah (delivered indications 10-12)

380cst $185
180cst $228
MGO $591

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $166
MGO 0.1%S: $338