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WTI oil futures fell again in Europe trade 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.

Market fundamentals and the technical constellation Wednesday morning were far more bearish than at the beginning of this week. Slumping equities, the expectations of builds in US crude oil inventories and technical selling signals added to selling pressure at oil markets. Oil futures thus tested their downward potential in the early morning, breaking below Tuesday's lows. Although Brent's support at 27.65 USD limited losses around noon, it gave way in US trading. Bullish news were lacking which is why selling predominated. The change in the WTI front month contract (Wednesday evening) made oil futures more volatile. However, investors didn't tend to cover their short-positions on this time. According to CMC Markets analyst Michael McCarthy, the change in the front month rather added to selling pressure. Market players cut their remaining long-positions as a price rally seems unlikely in the near term under the given circumstances. When oil futures at ICE and NYMEX hit fresh 12- and 13-year-lows and the WTI contract with delivery in February expired at 8.30 p.m., prices eventually saw a light upward correction. However, the API's data on US oil inventories renewedly put oil futures under pressure and so, futures settled with considerable losses.

ICE Gasoil contract for February delivery settled at 247.25 USD on Wednesday, this is 23.25 USD below Tuesday's settlement. With some 80,700 deals, the traded volume (front month) was above average.

Whilst the Stochastic indicator was still bearish at the WTI chart Wednesday morning, its impact has meanwhile waned. Neither the Stochastic indicator nor the RSI are currently giving off any fresh signals at the ICE and NYMEX charts. WTI on Wednesday dropped down to the lower Bollinger Band but bounced back from it. The contract has some slack from the lower Bollinger Band up to the 7-period moving average. This means, it has room to move up as well as down. Since the technical constellation doesn't yet provide any signals that might give oil futures a clear direction, we assess it as neutral. However, the downtrend remains intact. The 7-period moving averages might become key-resistances at ICE and NYMEX charts. If oil futures sustainably break above these resistances, further technical buying might be triggered. If the key resistances remain strong, though, the downtrend is likely to continue slightly above the lower Bollinger Band.

U.S.

Nymex above average: Although oil futures edged higher overnight, they have meanwhile erased their gains. Only ICE Gasoil is still trading slightly in the black in electronic trading this morning. Oil futures are currently trading near the levels they had at the open, staying above Wednesday's lows. The traded volume at NYMEX is far above average this morning. Market participants are now waiting for the European financial and forex markets to open and the economic indicators due today. Moreover, the DOE will release its report on US oil inventories at 5 p.m. this afternoon.

Forecast: Crude oil +2.3; Distillates -0.6; Gasoline +1.1 million barrels vs previous week.
API: Crude oil +4.6; Distillates +1.5; Gasoline +4.7 million barrels vs previous week.

Houston (ex-wharf indications 21-1)
380cst $112
180cst $189
MGO $327

New Orleans (ex-wharf indications 21-1)
380cst $131
180cst $185
MGO $329

Singapore (delivered indications 21-1)

Brent is down with -$0.27 for March contracts. Singapore paper bullish with +$5.50 for 180cst with +$6.30 for 380cst for Jan, and for Feb 180 cst +$5.25 and 380cst with +$6.05 with MGO contracts Jan with -$0.95 and in Feb with -$0.95 .The cargo market is bearish with 180cst -$3.36, 380cst with -$2.48 and MGO with -$2.51.

380cst $145
180cst $149
MGO $255

Fujairah (delivered indications 21-1)

380cst $132
180cst $145
MGO $450

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $114
MGO 0.1%S: $225