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Technical indicators: neutral to bearish

European equity markets opened lower today after Wall Street's gains were pared late Wednesday and fresh concerns surfaced about the weakness of the global economy. Crude oil prices broke three days of losses yesterday and are continuing to rise in electronic trading this morning.

Despite early losses, the front-month crude futures contract gained more than 50 cents to trade above $75 a barrel as European markets opened, supported by yesterday's demand report from the API.

Oil futures rose in New York for a second day yesterday as U.S. stocks followed European equities higher on easing concern that Europe’s sovereign-debt crisis will derail the global economic recovery. The weaker dollar and the high draw in U.S. crude stocks also lent some support.

OPEC crude-oil production in August fell 75,000 barrels, or 0.3 percent, to an average 29.15 million barrels a day, the lowest level since January. Output by members with quotas dropped 5,000 barrels to 26.805 million, 1.96 million above their target.

ICE gasoil September is expected to open 0.75 to 2.25 dollars lower at about 659.50 dollars/ton after settling at 660.50 dollars (official settlement price) Tuesday night. This was 14.00 dollars above Tuesday's settlement. Volume with some 53,800 deals above average.

Oilprices are still rangebound within the lateral medium-term trend. A small triangle has formed which will give momentum either way depending on the direction prices leave the triangle. Both RSI and Stochastic indicators are in neutral territory this morning and do not give any clear signals. First NYMEX crude resistance line seen at 75.40 dollars today, first support line at 74.00 dollars.

U.S.

Nymex Access trade: Oil prices are easing modestly in Asian trading hours and NYMEX electronic trading this morning, paring part of Wednesday's gains on expectations DOE will show an increase in stockpiles as U.S. demand falls following the end of the peak summer driving season. No news in the markets. The traded volume is above average.

APIs: crude oil -7.308; distillates +1.288, gasoline +0.654 million barrels vs previous week. Refinery utilization +1.7%.

DOEs: due out tonight.

Forecasts: +0.3; distillates +0.4; gasoline -0.6 million barrels vs previous week. Refinery utilization: -0.2

Houston (ex-wharf indications 8-9)

380cst: $425
180cst: $447
MGO: $714

Very tight avails for 180cst

New Orleans (ex-wharf indications 8-9)

380cst: $428
180cst: $451
MGO: $718

Singapore (correct as of 1430hrs local time)

Crude is gaining bullish momentum with +$1.23 Singapore paper is slowing with 180 cst +$1.80 and 380cst +$1.70 for Sep, and Oct 180 cst +$2.60 and 380cst +$2.90 with MGO Sep contracts at +$0.42 and for Oct at +$0.58. The cargo market is also turning again with 180cst +$2.25, 380cst +$2.71 and MGO +$0.53.

Singapore fuel oil prices rebounded more than $2.0/mt yesterday. The delivered bunker premiums were varying, ranging from $2.50 to $4.5/mt above the cargo prices tracking crude movements. Singapore market will be closed on public holiday tomorrow. Bunker fuel swaps were strongly up yesterday. Front month papers gained app. $7.5/mt in Rotterdam. Singapore papers were slightly weaker assign app. $6.75/mt to the price. Prices at the back end were even stronger adding more than a dollar to the contango structure of the forward curve. This may indicate expectations of stronger prices forward This morning both markets are trading down.

High premiums for prompt deliveries:

380cst: $443
180cst: $450
MGO: $660

Rotterdam

Yesterday (Only barge trade deals of >2 KT reported) 64KT was traded in the MOC between 426.00-428.00 with Totsa as the main seller to Petroned and Koch as the main buyers.

NWE HSFO markets are firming slightly, supported by a shortage of blending products. The arbitrage economics out to the US seem on the verge of becoming workable. The Med has seen some influx out of NWE, but the margins are very tight. The LSFO markets are balanced, with some Med demand surfacing.

380cst: $430
(1.0%): $458
180cst: $447
(1.0%): $477
DMB: N/A
MGO 0.1%S: $663