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Oil prices edged up on Wednesday on an upcoming meeting in Qatar to discuss an output freeze and on expectations of U.S. production declines, but analysts warned that neither the freeze nor the declines point to the end of a global supply glut.

The technical constellation was clearly bearish Tuesday morning. Moreover, the bullish market fundamentals which had fuelled last week's price rally waned. This constellation indicated that oil futures would test their downside, which they did in the first half of the day. Monday's lows but briefly limited the downside. Oil futures broke below these levels around noon. According to reports, the expected meeting between OPEC and Russia over a limitation of oil production is unlikely to take place in March as Moscow backed Iran's call for an increase in Iranian output to pre-sanction levels. The bearish estimates on US oil inventories and the repercussions of the OPEC's monthly energy report (released Monday) added to selling pressure. In the early afternoon oil futures were clearly in the red before regaining some ground. The partial halt of oil exports via the Kirkuk-Ceyhan pipeline caused some short-covering. However, oil futures remained soft, dropping back to earlier lows in late-afternoon trade. Some contracts even hit fresh lows. NYMEX WTI and Gasoline regained some traction overnight. The fact that the API reported less significant than expected builds in US crude oil inventories and the expectations of a renewed decline in US oil production bolstered prices. Although this sent the contracts traded on the ICE higher as well, futures ended the day with considerable losses.

ICE Gasoil contract for April delivery settled at 350.00 USD on Tuesday, this was 5.75 USD below Monday's settlement. With some 74,000 deals, the traded volume (front month) was above average.

The uptrend that had developed over the past few weeks was broken by Monday's and Tuesday's losses. The Stochastic indicator and the RSI generated selling signals which meanwhile are largely priced in. Although they have lost some of their influence, the indicators still slightly weigh on oil futures. The technical constellation provides more downward potential by now, although oil prices are increasingly consolidating after having broken below their uptrend. Traders are currently reassessing their positions. Since the effect of the selling signals generated at the beginning of this week is waning and the uptrends have been broken, we consider the technical constellation as neutral to bearish. However, selling pressure should be considerably less strong than in the past few days.

U.S.

Nymex above average: After having gained ground on the API's data and some short-covering last night, oil futures lacked direction in electronic trading this morning. They have traded in a rather narrow range so far. 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 for the release of a raft of US indicators due today. In the afternoon (at 3.30 p.m.) the DOE will release its data on US oil inventories. Moreover, market players eye the Fed chief Janet Yellen's statement on monetary policy this evening at 7.00 p.m.

Houston (ex-wharf indications 16-3)
380cst $156
180cst $272
MGO $361

New Orleans (ex-wharf indications 16-3)
380cst $164
180cst $209
MGO $353

Singapore (delivered indications 16-3)

Brent is bearish with +$0.35 for Apr contracts. Singapore paper is down with -$1.55 for 180cst with -$1.75 for 380cst for Mar, and for Apr 180cst -$1.05 and 380cst with -$1.35 with MGO contracts Mar with +$0.32 and in Apr with +$0.27.The cargo market is down with 180cst -$11.27, 380cst with -$12.05 and MGO with -$1.29.

380cst $174
180cst $178
MGO $340

Fujairah (delivered indications 16-3)

380cst $168
180cst $187
MGO $418

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $162
MGO 0.1%S: $358