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Oil slipped toward an 11-year low this morning, dented further by a seemingly relentless build in oversupply, and as the dollar strengthened after the U.S. Federal Reserve raised interest rates for the first time in nearly a decade.

The upward correction at oil markets seemed to have lost traction on Wednesday morning. The technical constellation was still slightly bullish in the early morning but with WTI having reached its 38.2% Fibonacci retracement, the upward potential of the US crude oil sort seemed to have abated. Market fundamentals were bearish again as the API had reported builds in US crude oil stockpiles and investors were expecting the Fed's rate hike. Moreover, the bullish impact of a possible lift of the export ban on US crude oil had already been priced in on Monday and Tuesday. The crude oil sorts WTI and Brent showed hardly any upward potential, whereas product futures slightly rose in the early afternoon. The DOE's report on US oil inventories release at 4.30 p.m. notably added to selling pressure. The report was clearly bearish and so there was no upward potential for oil futures any more. Prices retreated after the release of the DOE's data. The FOMC raised its interest rates late Wednesday evening, renewedly adding to selling pressure at ICE and NYMEX. Oil futures hit new lows in the evening, ending the day with considerable losses.

ICE Gasoil contract for January delivery settled at 337.50 USD on Wednesday, this is -8.25 USD below Tuesday's settlement. With some 78,700 deals, the traded volume (front month) was above average.

WTI on Tuesday reached its 38.2%-Fibonacci retracement which limited the upside. This also prompted WTI to re-enter its downtrend. Oil futures are already testing Wednesday's lows, indicating more downward potential. The lines of the Stochastic indicator have converged at the Brent and the WTI chart but the indicator doesn't give off any selling signals yet. Only if the lines of the indicator sustainably cross (at least by 3 points) will the indicator generate a selling signal. The combination of WTI's rebound from its Fibonacci retracement and this morning's tests of the downside makes the technical constellation slightly bearish. Actually, the signals of the Stochastic indicator are still lacking for a completely bearish assessment but if the indicator provides the expected selling signals in the course of the day, the technical constellation would turn clearly bearish. This might trigger a technical sell-off.

U.S.

Nymex is above average: Oil futures already tested Wednesday's lows in electronic trade this morning, weighed down by the bearish cues provided by the DOE's data and the FOMC's rate hike. So far, they haven't dropped below these levels, though. The traded volume at NYMEX is above average this morning. Market participants are waiting for the European financial and forex markets to open today as well as for the release of a several economic indicators, chiefly out of the USA.

Forecast: Crude oil -1.4; Distillates +1.6; Gasoline +1.3 million barrels vs previous week.
DOE: Crude oil +4.8; Distillates +2.6; Gasoline +1.7 million barrels vs previous week.
API: Crude oil +2.3; Distillates -1.8; Gasoline +0.1 million barrels vs previous week.

Houston (ex-wharf indications 17-12)
380cst $151
180cst $228
MGO $373

New Orleans (ex-wharf indications 17-12)
380cst $182
180cst $242
MGO $383

Singapore (delivered indications 17-12)

Brent is down with -$1.02 for December contracts. Singapore paper is bullish with +$6.95 for 180cst with -$7.00 for 380cst for Jan, and for Feb 180 cst -$7.20 and 380cst with -$7.00 with MGO contracts Jan with -$1.47 and in Feb with -$1.44 .The cargo market is bearish with 180cst -$2.22, 380cst with -$2.12 and MGO with -$0.15.

380cst $170
180cst $184
MGO $341

Fujairah (delivered indications 17-12)

380cst $168
180cst $198
MGO $594

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $152
MGO 0.1%S: $309