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Oil steadied this morning, well off a 12-year low set earlier in the month, supported by the possibility that major producers may cooperate to cut production.

Oil futures kicked off Wednesday in a bearish market environment. The technical constellation pointed to selling signals and the API's report indicated massive builds in US crude oil inventories. Even so, oil futures didn't lose much ground in the first half of the day as investors stayed on the side-lines ahead of the release of the DOE's data and the announcement of the FOMC's meeting results. Although the Stochastic indicator had generated selling signals at the Brent and the WTI chart in the morning, oil prices kept consolidating as market players remained cautious. Oil futures had already started to consolidate at the beginning of this week. The DOE's report was interpreted as bullish and so oil prices surged in late-afternoon trade. Moreover, Russian officials Wednesday evening implied that there had to be talks with OPEC-members over possible output cuts. That is why oil futures held steady until the night. The FOMC's meeting didn't bring about any breaking news but the USD declined after the meeting results had been announced. This bolstered oil futures in London and New York, which settled with considerable gains.

ICE Gasoil contract for February delivery settled at 292.00 USD on Wednesday, this is 9.25 USD above Tuesday's settlement. With some 48,900 deals, the traded volume (front month) was below average.

The Stochastic briefly gave off selling signals on Wednesday. However, the indicator has already turned neutral again at ICE and NYMEX charts. It will only generate fresh selling signals if its lines clearly cross once again. Brent's break above the 21-period moving average generated further upward potential whereas WTI and Gasoil failed to exceed this marker. If these contracts surpass the 21-period moving average in the course of the day, there would be bullish cues which might lead to further technical buying. For the time being, the technical constellation remains neutral, though, as decisive signals are still lacking.

U.S.

Nymex above average: Oil futures hovered near Wednesday's highs in electronic trading this morning, still buoyed by the DOE's data and the (faint) outlook on cooperation between OPEC and Russia. The traded volume at NYMEX is far above average this morning. Investors are now waiting for the European financial and forex markets to open as well as on the economic indicators due today.

Forecast: Crude oil +3.3; Distillates -1.9; Gasoline +1.1 million barrels vs previous week.
DOE: Crude oil +8.4; Distillates -4.1; Gasoline +3.5 million barrels vs previous week.
API: Crude oil +11.4; Distillates -0.6; Gasoline +4.1 million barrels vs previous week.

Houston (ex-wharf indications 28-1)
380cst $138
180cst $215
MGO $337

New Orleans (ex-wharf indications 28-1)
380cst $147
180cst $196
MGO $338

Singapore (delivered indications 28-1)

Brent is up with +$1.76 for Apr contracts. Singapore paper bullish with +$9.75 for 180cst with +$10.50 for 380cst for Feb, and for Mar 180cst +$9.50 and 380cst with +$9.25 with MGO contracts Feb with +$2.12 and in Mar with +$2.14 .The cargo market is bullish with 180cst -$13.16, 380cst with -$12.74 and MGO with -$2.70.

380cst $158
180cst $168
MGO $268

Fujairah (delivered indications 28-1)

380cst $152
180cst $162
MGO $449

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $153
MGO 0.1%S: $303