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Oil prices extended sharp losses from the prior session in Europe trade this morning, after Saudi Arabia dashed hopes for collective production cuts and following bearish industry data on U.S. stockpiles.

Market fundamentals and the technical constellation were slightly bearish for oil futures on Tuesday morning. Speculations over a freeze of production (OPEC and Russia) seem to have been priced in by now, providing no further upward potential. The technical indicators still had a slightly bearish effect on prices. Even so, oil futures at ICE and NYMEX gained ground around noon, with Brent testing its resistance at 35 USD. This resistance capped gains. In the afternoon investors took profits, the more so as analysts expected another weekly rise in US crude oil inventories. If these estimates prove right, crude oil stockpiles would renwedly post record highs. During a conference in Houston, Texas, Saudi Arabia's oil minister said that he considered output cuts as unlikely. Moreover, he explained that oversupplies could only be ended by production limits. This would "take time", though. Meanwhile, Iran's oil minister said that the call for Iran to limit its output was "a joke". He thus pointed out that Iran wouldn't join a concerted freeze of output levels. After the oil ministers' comments, oil futures slumped. Late in the evening the API's bearish data on US oil inventories added to selling pressure which is why oil futures ended the day with fresh lows.

ICE Gasoil contract for March delivery settled at 302.00 USD on Tuesday, this was 15.25 USD below Monday's settlement. With some 60,400 deals, the traded volume (front month) was above average.

Neither the Stochastic indicator, nor the RSI are currently giving off any fresh signals. The Stochastic indicator is still slightly bearish after it had dropped below 50% at the WTI and the Brent chart. Oil futures broke below Tuesday's lows earlier this morning, breaching several supports. This generated fresh downward potential. If the 7-period moving average and the 21-period moving average cross at the Brent and/or the Gasoil chart, a fresh selling signal would be triggered. Even though there are no clear cues this morning, we assess the technical constellation as bearish for WTI's drop below the technical triangle provides much more downside than upward potential.

U.S.

Nymex above average: Oil futures retreated in early electronic trading this morning, dropping below Tuesday's lows weighed down by comments made by some OPEC members and the API's bearish data on US oil inventories. 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 for the release of some economic indicators, and the DoE's report on US oil inventories (at 4.30 p.m.).

Houston (ex-wharf indications 24-2)
380cst $144.50
180cst $227
MGO $347

New Orleans (ex-wharf indications 24-2)
380cst $144.50
180cst $191.50
MGO $326

Singapore (delivered indications 24-2)

Brent is losing with -$0.96 for Apr contracts. Singapore paper is down with -$5.70 for 180cst with -$5.75 for 380cst for Mar, and for Apr 180cst -$5.50 and 380cst with -$5.40 with MGO contracts Mar with -$1.23 and in Apr with -$1.21 .The cargo market is reacting now to the losses on paper with 180cst -$0.65, 380cst with -$1.04 and MGO with +$0.10.

380cst $152
180cst $159
MGO $295

Fujairah (delivered indications 24-2)

380cst $155
180cst $175
MGO $417

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $138
MGO 0.1%S: $283