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Oil prices were higher in European trade this morning, extending sharp gains from the prior session after U.S. oil inventories unexpectedly fell from the highest level in more than eight decades.

Wednesday morning, the selling pressure has clearly eased at oil markets. The technical constellation pointed to a test of the resistances which limited the downtrends. In terms of MARKET fundamentals, the API's bullish report on US oil inventories released Tuesday night fostered oil prices. Oil futures rose up to their 7-period moving averages, which served as key-resistances. However, they failed to break above these levels. Market participants were looking ahead to the release of the DOE's official data on US petroleum stockpiles due at 4.30 p.m. which came in clearly bullish. When oil futures broke above the 7-period moving averages, technical buying was triggered. A temporary rise in the euro/dollar also fostered oil futures. Futures thus ended the day with considerable gains and fresh highs.

The Stochastic indicator Wednesday gave off buying signals at the ICE charts, confirming the buying signal which had already existed at the WTI chart. At the Brent and WTI chart, the indicator also exceeded 50%, reinforcing its bullish bias. Moreover, the RSI surpassed 30%, giving off additional buying signals. Oil futures have already climbed above Wednesday's highs this morning. Brent and WTI sustainably broke above the 7-period moving averages. This generated fresh upward potential, which might send oil futures near their 21-period moving averages. We thus assess the technical constellation as bullish in the short-term.

U.S.

Nymex above average: Oil futures kept track of Wednesday evening's gains in Asia and in Globex electronic trade this morning, fostered by the technical buying signals. They have already broken above Wednesday's highs. However, upward potential has remained limited up to now. 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 further comments on the meeting of important oil producers. Moreover, they are looking ahead to the release of some US indicators due today.

Forecast: Crude oil +3.3; Distillates -0.9; Gasoline -1.5 million barrels vs previous week.
DOE: Crude oil -4.9; Distillates +1.8; Gasoline -1.3 million barrels vs previous week.
API: Crude oil -4.3; Distillates +2.7; Gasoline -0.5 million barrels vs previous week.

Houston (ex-wharf indications 7-4)
380cst $148
180cst $255
MGO $351

New Orleans (ex-wharf indications 7-4)
380cst $161
180cst $202
MGO $347

Singapore (delivered indications 7-4)

Brent is bullishh with +$1.40 for Apr contracts. Singapore paper is down with +$8.95 for 180cst with +$8.55 for 380cst for Apr, and for May 180cst +$9.00 and 380cst with +$8.25 with MGO contracts Apr with +$2.60 and in May with +$2.60.The cargo market is down with 180cst +$3.73, 380cst with +$5.14 and MGO with +$0.95.

380cst $173
180cst $178
MGO $316

Fujairah (delivered indications 7-4)

380cst $167
180cst $172
MGO $424

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $161
MGO 0.1%S: $323