---

Technical indicators: neutral to bearish

Oil prices are still in a short-term downtrend, with the upper limit at 74.80 dollars (today's first resistance line) for WTI crude. Should the resistance be breached, more technical buying orders are expected. The RSI remains in neutral territory while the Stochastic indicator signalled un upward correction Monday. First WTI crude support line seen at 73.85 dollars today, first resistance line at 74.80 dollars (the upper limit of the new downtrend channel). Yesterday's rally was partly technical, after WTI crude breached 74.40 dollar resistance.

Oil prices tracked a global rally in equities yesterday in the afternoon, but gains came in thin trade in New York ahead of the Fed meeting. There was no imminent reason for the rally.Equity markets are expected to open on the previous session's level as the sentiment of investors is getting better ahead of the FED meeting. Oil prices are also seen sticking to Monday's gains, with little volatility expected.

ICE Gasoil October is expected to open 1,50 to 2,50 dollars lower at about 680,25 dollars/ton after settling at 682,25 dollars (official settlement price) Monday night. This was 18,75 dollars above Friday's settlement. Volume with some 52.700 deals above average.

NYMEX crude for October delivery expires tonight, so liquidation is pressuring the market and liquidity is shifting to the November contract. The spread between both contracts has widened to 1.70 dollars, a result of the crude oversupply in the USA. But the overall oil market is not bad, reflected by the second-month contract.

U.S.

Nymex Access trade: Oil prices are flat in Asian trading hours and NYMEX electronic trading this morning as traders linger ahead of the important Federal Reserve meeting later in the day. No news in the markets. The traded volume is on average.

The FED will keep its benchmark rate at between zero and 0.25 percent at today’s meeting, where it has been since December 2008, so analysts, who expect prices first to rally after the release of the decision and to fall back down later after the realization that a low interest rate also means that the FED has little confidence in the strength of the economy.

Survey of US petroleum inventories due out today is as follows: crude oil -1.5; distillates +0.1 million barrels; gasoline unchanged vs previous week. Refinery utilization: -0.5%; The temporary shut-down of Candian Enbridge Pipeline is expected to have reduced crude stocks last week.

Houston (ex-wharf indications 21-9)

380cst: $438
180cst: $458
MGO: $715

Very tight avails for 180cst

New Orleans (ex-wharf indications 21-9)

380cst: $441
180cst: $461
MGO: $718

Singapore (correct as of 1430hrs local time)

Crude is bulish on technical speculation currently with WTI +$0.94. Singapore paper is following cautiously with 180cst +$3.20 and 380cst +$3.85 for Oct, and Nov 180 cst +$3.25 and 380cst +$3.85 with MGO Oct contracts +$1.20 and for Nov at +$1.21. The cargo market is bearish with the market well supplied with 180cst -$4.74, 380cst -$4.51 and MGO -$0.29.

The Singapore fuel oil price fell down by more than $4.0/mt during the Platts window yesterday. The weak bunker market in Singapore resulted in the fuel oil trading at a $2.5 - 4.0/mt discount against cargo prices. The delivered bunker premium was app. by $1.0/mt above the cargo yesterday. Front month bunker fuel swaps were assessed up by app. $3.0/mt in Rotterdam and a little more in Singapore. Prices at the backend of the curve were up as well, but a little less narrowing a contango by app. 50 cents. This morning both markets are trading down.

High premiums for prompt deliveries:

380cst: $445
180cst: $455
MGO: $671

Fujairah (delivered indications 20/9)

380cst: $452
180cst: $474
MGO: $730

Rotterdam

Yesterday (Only barge trade deals of >2 KT reported) 48KT was traded in the MOC between 425.50-427 with Totsa as the main seller to Gunvor and Chemoil notable as the main buyers.

With the Singapore market well supplied the arbitrage is now closed. However, NWE demand is weakening and therefore despite the reported 5 VLCC fixtures prices are steady. Litasco, RWE, Vitol and BP all fixed VLCCs and Total a Suezmax all for the Singapore arb. Gunvor also has a vessel loading in Tallinn heading direct. The US influx dried up, and local suppliers are reluctant to meet short demand, to fully profit from the contango.

380cst: $438
(1.0%): $464
180cst: $463
(1.0%): $484
DMB: N/A
MGO 0.1%S: $690