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WTI oil prices ticked higher in European trade this morning, after falling for two straight sessions, amid speculation weekly supply data due later in the session will show U.S. crude inventories rose at a slower pace than expected last week.

Oil's tendency was slightly bearish in Asian trading on Tuesday. If the technical selling pressure had somewhat diminished compared to Monday the technical constellation was still to the downside. At the WTI chart an "Evening Star" had formed, a constellation that lets expect that short-term uptrend will soon be finished. So, after a short recovery, oil prices lost ground again during European trading. News that the production of Brent in the North Sea is expected to increase and the disappointing indicators released in China, the second largest oil consumer on the globe, applied fundamental pressure. The weak dollar, making dollar-nominated oil futures less expensive for investors outside the U.S. and thus creating buying interest, halted oil's slide temporarily. In the afternoon, traders took the chance to take profit on the strongly overbought euro, letting the dollar rise vs the European currency so that the oil market lost the stabilizing factor of a weak U.S. currency. In after-hour trading the slightly bullish API report caused a modest upward correction at ICE and NYMEX.

ICE Gasoil contract for May delivery settled at 394.00 USD on Tuesday, this was 16.25 USD below Monday's settlement. With some 32,100 deals, the traded volume (front month) was below average.

The selling signals which the RSI and the Stochastic had triggered at the beginning of this week were followed by more signals on Tuesday that increased the technical downward pressure. Prices fell below their MA7's, thus opening up more downside. But, as a good part of the bearish potential has meanwhile been absorbed by the price collapse at the beginning of this week somewhat reducing the selling pressure, we consider the technical constellation still as neutral to bearish this morning. But we like to point out that the MA21's, acting as key supports today, could come well within reach. If prices fall below their Tuesday's lows the technical constellation would turn bearish and the MA21 could well be hit.

U.S.

Nymex above average: After having cautiously increased after the release of the API's report last night, oil futures lost ground again in East Asia and in Globex electronic trade this morning on a stronger dollar and fresh worries on global oil demand. The traded volume at NYMEX is about on average this morning. Investors are waiting for the European financial and forex markets to open as well as for the release of a series of economic indicators due today. They will also watch closely the DoE's official report on U.S. petroleum stocks, released at 4.30 p.m. as usual.

Forecast: Crude oil +1.2; Distillates ±0.0; Gasoline -0.2 million barrels vs previous week.
API: Crude oil +1.3; Distillates -2.6; Gasoline -1.2 million barrels vs previous week.

Houston (ex-wharf indications 4-5)
380cst $192
180cst $296
MGO $408

New Orleans (ex-wharf indications 4-5)
380cst $202
180cst $247
MGO $410

Singapore (delivered indications 4-5)

380cst $211
180cst $218
MGO $402

Fujairah (delivered indications 4-5)

380cst $221
180cst $225
MGO $444

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $218
MGO 0.1%S: $403