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U.S. crude prices briefly rose to a premium over internationally traded Brent this morning following a report of a surprise dip in U.S. inventories and the potential for more exports in an oil market which still suffers from ballooning oversupply.

Tuesday morning market fundamentals remained bearish whereas the technical constellation was considered neutral. Oil futures faced a rather volatile trading day as many investors tried to reduce their risks ahead of the Christmas holidays, covering their short positions. Other market participants took advantage of the price increases to renewedly bet on falling prices. The Stochastic indicator didn't give off any buying signals at the Gasoil and the Brent charts, failing to confirm the buying signal it had provided at the WTI chart. Brent hit a fresh 11-year-low at 35.98 USD, whereas WTI steadied in the afternoon. The combination of short-coverings, reports on US crude oil imports being hampered by bad weather conditions at the ports in the Gulf of Mexico and the lift of the export ban on US crude oil (last week) favored the rise. The US crude oil sort surged to its resistance at 36.55 USD. However, this resistance remained strong. Due to this rise, WTI briefly traded higher than its benchmark Brent. For years, the North Sea crude oil sort was more expensive than WTI. Later in the evening the API released its report on US petroleum stocks, showing an unexpectedly sharp draw in US crude oil inventories. Whilst Brent and Gasoil stayed comparatively weak within the boundaries of Monday's trading ranges, WTI posted considerable gains.

ICE Gasoil contract for January delivery settled at 334.25 USD on Tuesday, this is +5.25 USD above Monday's settlement. With some 47,700 deals, the traded volume (front month) was below average.

The Stochastic indicator at the WTI chart remains bullish, whereas at the Brent and Gasoil charts it still hasn't provided any buying signal. In fact, the indicator is slightly bearish at the Gasoil chart. The potential for a technical upward correction remains limited as long as there aren't any further buying signals, the more so as WTI is still below the 7-period moving average which is an important resistance. That is why we assess the technical constellation as neutral. Possible buying signals of the RSI (Gasoil and WTI) and the Stochastic indicator (Brent) might change this, however.

U.S.

Nymex is above average: After Tuesday's price increase caused by the API's data on US oil inventories, oil futures traded in a rather narrow range in electronic trade this morning. ICE Gasoil has just dropped back down from a strong resistance. 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 several economic indicators. At 4.30 p.m. the DOE will release its data on US oil inventories.

Forecast: Crude oil +0.6; Distillates +2.0; Gasoline +1.1 million barrels vs previous week.
API: Crude oil -3.6; Distillates +0.8; Gasoline +3.1 million barrels vs previous week.

Houston (ex-wharf indications 23-12)
380cst $144
180cst $213
MGO $356

New Orleans (ex-wharf indications 23-12)
380cst $197
180cst $247
MGO $381

Singapore (delivered indications 23-12)

380cst $161
180cst $178
MGO $329

Fujairah (delivered indications 23-12)

380cst $160
180cst $203
MGO $599

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $139
MGO 0.1%S: $306