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WTI oil futures tumbled below the $27-level to re-approach the lowest level in almost 13 years in Europe trade this morning, as record crude inventories at the Cushing delivery hub underlined concerns over a supply glut.

Wednesday morning oil futures tended to the downside. In terms of market fundamentals the IEA's and the EIA's monthly energy reports, the API's bearish inventories data and Kuwait's announcement to further increase oil production weighed on prices. The technical downward potential had waned since Tuesday afternoon but the constellation still favoured more tests of the downside. In the course of the day, the market thus proved to be very volatile, with oil futures struggling to find a direction. Data wise, the OPEC's monthly energy report brought no clear cues, failing to give markets direction. Traders were eying the release of the DOE's report on US petroleum stockpiles. This release added to volatility. In a first reaction on the DOE's data oil prices surged. However, this rise up to new intraday-highs was short-lived. Whilst Brent and Gasoil later consolidated in a narrow range near their opening levels, WTI was pushed down by the bearish factors of the inventories report. The US crude oil sort eventually settled with new lows.

ICE Gasoil contract for February delivery settled at 276.25 USD on Tuesday, this was 10.75 USD below Tuesday's settlement. With some 55,200 deals, the traded volume (front month) was on average.

After oil futures broke below their lateral trend that had developed since the end of January / the beginning of February, most of the bearish effect of the technical indicators has been spent. The Stochastic indicator and the RSI are still losing impact, moving in deeply oversold territory. Since the 7-period moving average and the 21-period moving average have crossed at the WTI chart, the technical constellation remains bearish, the more so as the US crude oil sort has already has already broken below Wednesday's low in the early morning. If the lines of the Stochastic indicator cross and if the RSI climbs back above 30%, fresh buying signals might be generated. Without such signals, the technical constellation remains neutral to bearish.

U.S.

Nymex above average: Oil futures stayed near Tuesday's lows in Asia and early electronic trading this morning but hovered slightly above these levels. The traded volume at NYMEX is above average this morning. Investors are now waiting for the European financial and forex markets to open as well as on the economic indicators which are on the agenda today.

Forecast: Crude oil +3.7; Distillates -0.9; Gasoline +1.0 million barrels vs previous week.
API: Crude oil +2.4; Distillates +1.7; Gasoline +3.1 million barrels vs previous week.
DOE: Crude oil -0.8; Distillates +1.3; Gasoline +1.3 million barrels vs previous week.

Houston (ex-wharf indications 11-2)
380cst $138
180cst $203
MGO $327

New Orleans (ex-wharf indications 11-2)
380cst $142
180cst $190
MGO $327

Singapore (delivered indications 11-2)

Brent is now dropping after the overdone with -$0.65 for Apr contracts. Singapore paper is up with +$1.25 for 180cst with +$2.00 for 380cst for Feb, and for Mar 180cst +$1.25 and 380cst with +$1.30 with MGO contracts Feb with -$0.09 and in Mar with -$0.42 .The cargo market is losing with 180cst -$17.51, 380cst with -$18.65 and MGO with -$3.24.

380cst $154
180cst $166
MGO $284

Fujairah (delivered indications 11-2)

380cst $153
180cst $169
MGO $419

ARA (Amsterdam - Rotterdam - Antwerp)

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