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Oil prices were lower in European trade this morning, pulling back from the prior session’s two-month highs, but losses were limited amid growing speculation that a 20-month-long market rout is coming to an end.

Market fundamentals and the technical constellation remained neutral on Wednesday morning. Along with reports on export losses from Iran and Iraq, which are expected to amount to approximately 0.8 mbpd, news saying that the majority of producers have meanwhile agreed upon an output freeze bolstered prices. However, the massive builds in US crude oil stockpiles reported by the API Tuesday evening and the reports on high stocks in the ARA region prevented a significant rise in oil futures. Monitors say that the number of oil tankers waiting in front of the ports in the ARA region has doubled lately (compared to the usual levels). Oil futures remained rangebound until the afternoon as traders were waiting for the release of the DOE's data on US oil reports. Only the product futures (Gasoil, Heating Oil and Gasoline) edged slightly higher in the afternoon. When the DOE released its report, oil markets became increasingly volatile. That is why oil futures first slumped only to reach new highs little later. Although the change in US oil inventories and the development of product demand were seen as clearly bearish, the decline in US crude oil production prompted market players to cover their short-positions after the first downward reaction. Oil futures remained volatile in the evening, ending the day with considerable gains.

ICE Gasoil contract for March delivery settled at 331.50 USD on Wednesday, this was 8.50 USD above Tuesday's settlement. With some 55,800 deals, the traded volume (front month) was on average.

Oil futures are staying above important supports and within their short-term uptrend. The Shooting star which had developed last Friday failed to show a greater effect this week. Meanwhile the impact of this candlestick pattern has completely waned as oil futures have exceeded its high. Neither the RSI nor the Stochastic indicator are giving off any fresh cues at the Brent, the WTI or the Gasoil chart. However, the indicators are heading deeper and deeper into overbought territory. At the NYMEX Gasoline chart the Stochastic indicator gave off a selling signal after its lines had crossed. Even so, the technical constellation can only get clearly bearish if the selling signal is generated at the other charts, too. At the Brent and the WTI chart the RSI is above 70%. If the indicator drops back below 70%, there would be a selling signal. Currently, the uptrend is still intact but it could be broken as soon as there are fresh signals. We thus regard the technical constellation as neutral.

U.S.

Nymex above average: After Wednesday evening's price rally oil futures tend to the downside in a rather narrow range in early electronic trading this morning. The traded volume at NYMEX is above average this morning. Market players are now waiting for the European financial and forex markets to open as well as for the release of some economic indicators.

Houston (ex-wharf indications 3-3)
380cst $139
180cst $282
MGO $339

New Orleans (ex-wharf indications 3-3)
380cst $146
180cst $191
MGO $325

Singapore (delivered indications 3-3)

Brent is neutral with ±$0.00 for Apr contracts. Singapore paper is down with -$5.15 for 180cst with -$4.50 for 380cst for Mar, and for Apr 180cst -$5.35 and 380cst with -$5.45 with MGO contracts Mar with +$0.13 and in Apr with +$0.12 .The cargo market is down with 180cst -$2.49, 380cst with -$2.55 and MGO down with +$0.05.

380cst $158
180cst $164
MGO $305

Fujairah(delivered indications 3-3)

380cst $157.50
180cst $177
MGO $418

ARA(Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $151
MGO 0.1%S: $313