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WTI oil prices edged lower in European trade this morning, amid speculation weekly supply data due later in the session will show U.S. crude inventories rose at a faster pace than expected last week.

Fundamentals were largely unchanged Tuesday morning. If the draw in Cushing crude stocks that Genscape had announced, lent some support, this influence was limited as nationwide stocks were seen rising strongly. The technical constellation was slightly bearish after the lines of the Stochastic indicator had crossed at ICE and NYMEX, sending oil futures as low as their 7-day moving average lines that had limited oil's downside in the past days. The 41.00 dollar40.90 dollar376.25 dollars42.00 dollar41.80 dollars support for Brent and the support for WTI stopped oil's slide and prices at ICE and NYMEX rebounded on technically driven buying orders in the afternoon. The first resistances were breached at the ICE but eventually the rise was stopped by the strong resistance (gasoil) and resistance (Brent). As for the WTI, the contract did not succeed to breach its first resistance at. News that Russia will take part in the OPEC meeting at Doha was hardly a surprise, while Libya refused to participate and also says no to an output freeze. The news had only little influence on the market that gained momentum again after the release of the API report. The futures lost ground in a first reaction to the data, even though they are not obviously bearish as a whole.

ICE Gasoil contract for April delivery settled at 374.00 USD on Tuesday, this was 3.75 USD above Monday's settlement. With some 50,100 deals, the traded volume (front month) was slightly below average.

The seven day moving average lines, key supports at ICE and NYMEX, proved strong on Tuesday, limiting oil's downside. They are thus also today key to an important downward correction. The Stochastic's selling pressure has eased at the Brent chart while the indicator stays clearly bearish at the gasoil and the WTI charts. This signals more tests of the key supports at the MA7 level which is why we still consider the technical constellation as neutral to bearish this morning. More downside will only be opened when the MA7 is breached significantly. Then, the technical constellation would turn to bearish.

U.S.

Nymex above average: Oil futures lost ground in Asian trading this morning and consolidated their losses in Globex electronic trade. At the beginning of European trading they managed to recover a bit. The traded volume at NYMEX is about on average this morning. Market players are now waiting for the European financial and forex markets to open as well as for the release of only a few economic indicators due today. Apart from that, they are waiting for the official DoE report on US oil inventories due at 4.30 p.m.

Forecast: Crude oil +2.9; Distillates -0.8; Gasoline -2.0 million barrels vs previous week.
API: Crude oil +8.8; Distillates -0.4; Gasoline -4.3 million barrels vs previous week.

Houston (ex-wharf indications 23-3)
380cst $164
180cst $278
MGO $384

New Orleans (ex-wharf indications 23-3)
380cst $175
180cst $221
MGO $371

Singapore (delivered indications 23-3)

Brent is bearish with +$0.22 for Apr contracts. Singapore paper is down with x$0.00 for 180cst with x$0.00 for 380cst for Apr, and for May 180cst +$0.25 and 380cst with +$0.25 with MGO contracts Apr with +$0.29 and in May with +$0.36.The cargo market is down with 180cst +$4.67, 380cst with +$3.78 and MGO with +$0.31.

380cst $187
180cst $192
MGO $350

Fujairah (delivered indications 23-3)

380cst $181
180cst $194
MGO $419

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $172
MGO 0.1%S: $368