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Oil prices held near the prior session's seven-month highs in European trade this morning, amid speculation weekly supply data due later in the session will show U.S. crude inventories fell for the second straight week.

Market fundamentals were clearly bullish on Tuesday. The wildfires in Canada renewedly put oil sands facilities at risk and Goldman Sachs analysts said that the market saw a deficit of crude oil in the short-term. Besides, other experts expected a renewed draw in nationwide US crude oil inventories. However, some market players also tended to take profits from Monday's price rally. This put oil futures under pressure around noon. In the course of the afternoon, oil futures renewedly tested their upward potential, though. Although Shell resumed production at its Brutus oil platform in the Gulf of Mexico, the outages in Canada predominated investor sentiment, pushing prices to fresh 2016-highs.

ICE Gasoil contract for June delivery settled at 437.00 USD on Tuesday, this was 11.50 USD above Monday's settlement. With some 96,300 deals, the traded volume (front month) was above average.

The technical upward potential is limited, now that oil futures in London and New York have reached the upper Bollinger Band or even (like ICE Gasoil) have surpassed it. From a technical perspective, another rise in oil prices has thus become unlikely. Prices are more likely to consolidate or see a downward correction. The Stochastic indicator and the RSI are still moving in overbought territory, also favouring a downward correction if selling signals are triggered. The Stochastic indicator might give a selling signal if its lines cross but this hasn't been the case yet. Only if the lines of the indicator clearly cross, will there be a bearish signal. That is why we are currently assessing the technical constellation as neutral with prices trading within their short-term uptrends.

U.S.

Nymex above average: Oil futures traded in a narrow range on a high level during the Asian session and in Globex electronic trading this morning,. 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 news on the situation in Canada. They are also eying to the release of some economic indicators due today. Moreover, the DOE will release its data on US petroleum stockpiles this afternoon.

Forecast: Crude oil -2.4; Distillates -0.8; Gasoline -0.6 million barrels vs previous week.
API: Crude oil -1.1; Distillates -2.2; Gasoline -1.9 million barrels vs previous week.

Houston (ex-wharf indications 18-5)
380cst $220
180cst $319
MGO $443

New Orleans (ex-wharf indications 18-5)
380cst $231
180cst $280
MGO $434

Singapore (delivered indications 18-5)

380cst $228
180cst $231
MGO $425

Fujairah (delivered indications 18-5)

380cst $241
180cst $245
MGO $479

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $223
MGO 0.1%S: $423