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Technical indicators: neutral to bearish

Oil futures shed part of their gains in after-hours trading after having soared on the dollar sell-off and rising US and European equities. The bullish sentiment came as a surprise, according to analysts, given that US consumer confidence index fell sharply in September. Oil prices breached first resistance lines Tuesday after NYMEX crude support at 75.50 dollars had proved strong. The rally was then halted by ICE brent resistance at 79.50 dollars. The RSI indicator is neutral this morning, the Stochastic is in overbought territory, paving the way for a downward correction . First WTI crude support line remains at 75.50 dollars today, first resistance line at 77.00 dollars. Oil prices are seen rangebound today ahead of the release of DOE petroleum inventories. The worse-than-expected US economy data released Tuesday weigh on prices and the overbought market situation gives a bearish signal.

ICE Gasoil October is expected to open unchanged to +1,50 dollars at about 682,75 dollars/ton after settling at 682,00 dollars (official settlement price) Tuesday night. This was 10,75 dollars above Monday's settlement. Volume with some 65.400 deals above average.

U.S.

Nymex Access : Oil prices are edging higher in Asian trading hours and NYMEX electronic trading this morning after API data showed last night crude and distillate stockpiles declined in the United States, reducing a surplus that has weighed on market sentiment for months. No news in the markets. The traded volume is above average.

Survey of US petroleum inventories :

APIs: crude oil -2.415; distillates -2.814, gasoline +3.018 million barrels vs previous week. Refinery utilization +1.4 % = 83.6%

crude oil -0.1; distillates +0.4; gasoline +1.1 million barrels vs previous week. Refinery utilization: -0.4%

Houston (ex-wharf indications 28-9)

380cst: $435
180cst: $457
MGO: $722

Very tight avails for 180cst

New Orleans (ex-wharf indications 28-9)

380cst: $437
180cst: $459
MGO: $725

Singapore (correct as of 1430hrs local time)

Crude is gaining post stock reports with WTI +$0.81. Singapore paper is reacting to the draws with 180cst +$4.55 and 380cst +$4.75 for Oct, and Nov 180 cst +$5.55 and 380cst +$5.70 with MGO Oct contracts +$1.05 and for Nov at +$1.05. The cargo market is yet to react to the move up on paper yesterday with 180cst -$4.67, 380cst -$3.94 and MGO -$1.10.

The Singapore fuel oil price fell by more than $4.0/mt during the Platts window yesterday. Singapore is expecting app. 3.7 to 3.8 million mt of cargoes for October which pressure the cargo premium further to a discount in a range of -5.0 to -3.5/mt. The delivered premium was at app. $1.00/mt above cargo prices. Bunker fuel swaps were strongly up yesterday both in Rotterdam and in Singapore. Prices at the backend of the curve were a little stronger compared to the front. Prices in Singapore remained a little weaker compared to NWE papers. This morning both markets are trading down.

High premiums for prompt deliveries:

380cst: $445
180cst: $454
MGO: $670

Fujairah (delivered indications 28/9)

380cst: $445
180cst: $466
MGO: $722

Rotterdam

Yesterday (Only barge trade deals of >2 KT reported) 52KT was traded in the MOC between 429.50-433.00 with Total the biggest buyer with Mercuira, Litasco and Cargill all also active as buyers and Koch and Gunvor the biggest sellers.

Northwest European high sulfur fuel oil remained supported Tuesday on poor blending margins and further possible arbitrage fixtures to Singapore in second-half October despite market weakness there, sources said. “There is about 400 kt of RMG and 400 kt of RMK demand every month, but blending margins are negative, so in Rotterdam the market can be tight for prompt RMG. The Singapore HSFO was recently a front-heavy market due to relatively soft demand and heavy arbitrage supplies from the West. The Singapore 180 CST HSFO cargo market was seen at about Mean of Platts Singapore minus $5/mt Tuesday. September saw five VLCCs and one Suezmax loading in NWE to work an arbitrage to Asia, and sources said that these, along with the expectation of more fixtures October, was keeping levels buoyant. Weak freight means the arbitrage is never too far away from working and that is the main thing keeping NWE propped up fixtures are likely for second half October loading because then you can land into the December Singapore screen and collect another $3.50/mt contango. Lump-sum rates for VLCCs were around $2.8 million, Platts data showed. Low sulphur fuel oil market in NWE, meanwhile, saw healthy product availability from regional and arbitrage barrels and one trader said he expected the hi-lo differential to remain weak.

380cst: $434
(1.0%): $458
180cst: $459
(1.0%): $481
DMB: N/A
MGO 0.1%S: $687