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Technical indicators: neutral to bullish

Investors took profit in late NYMEX session and after-hour trading after they had brushed off earlier a jump in U.S. crude supplies, which suggests weak demand for fuel. More crude oil is produced and less refined, a clear indication of over supply. The earlier gain in the oil price was mostly placed on weakness in the dollar against the euro.

ICE Gasoil October is expected to open 2.00 to 3.50 dollars lower at about 730.75 dollars/ton after settling at 733.50 dollars (official settlement price) Wednesday night. This was 9.75 dollars above Tuesday's settlement. Volume with some 47,400 deals on average.

The short-term uptrend has become steeper. Both RSI and Stochastic indicators are still in overbought territory but give no clear signals. A technical downward correction is still possible, but for the time being analysts see more upward potential, the more as the fundamentals still dominate investor's decisions. First WTI crude support line at 82.30 dollars today, first resistance line at 84.00 dollars.

U.S.

Nymex Access : Oil futures edged higher in Asian trading hours and NYMEX electronic trading this morning, crude oil approaching 84.00 dollars for a barrel, as the weak U.S. dollar fuels gains in commodities. No news in the markets. The traded volume is below average.

Survey of US petroleum inventories :

APIs: crude oil +4.442; distillates -0.777; gasoline -4.059 million barrels vs previous week. Refinery utilization -2.0 % = 81.6%

DOEs: crude oil +3.088; distillates -1.124; gasoline -2.646 million barrels vs previous week. Refinery utilization -2.7 % = 83.1%

Forecasts : crude oil -0.1; distillates -0.6; gasoline -0.3 million barrels vs previous week. Refinery utilization: -0.4%

Houston (ex-wharf indications 6-10)

380cst: $473
180cst: $493
MGO: $747
Very tight avails for 180cst

New Orleans (ex-wharf indications 6-10)

380cst: $475
180cst: $496
MGO: $750

Singapore (correct as of 1430hrs local time)

Crude is gaining still with WTI +$0.81. Singapore paper is mirroring crude with 180cst +$4.30 and 380cst +$5.05 for Oct, and Nov 180 cst +$4.45 and 380cst +$5.10 with MGO Oct contracts +$0.64 and for Nov at +$0.57. The cargo market is starting to react to the bullishness with 180cst +$7.70, 380cst +$7.60 and MGO +$1.51.

The Asian fuel oil crack continued to weaken as continued crude strength outweighed the demand for fuel oil. Bunker demand was still pretty soft over recent climbing outright prices. The delivered premiums were more than $1.0 above cargo prices yesterday.

High premiums for prompt deliveries:

380cst: $480
180cst: $489
MGO: $713

Fujairah (delivered indications 6/10)

380cst: $481
180cst: $502
MGO: $745

Africa (indications 7/10)

Rotterdam

Yesterday (Only barge trade deals of >2 KT reported) 48KT was traded in the MOC between 465.00-468.00 with Litasco as the main seller to a mixed bag of buyers.

Bullish crude movements despite the build in US stocks added to the relatively weak avails is keeping the HSFO markets firm. The East bound arbitrage seems to become at workable levels again, also underpinning the local markets. Two VLCC's are reported to be fixed for October loading one for Vitol's accounts, the other for RWE. Consequently healthy buying interest is being shown especially for bunker spec. THe market structure remains still though with Oct / Nov contango spread assessed at minus $1.75/mt, $0.25 weaker. The Fos Lavera strike situation is tightening things in the Med with the North-Med differential swap narrowing $3 on the day with demand strengthening in especially Gibraltar and Malta. Product length in the LSFO markets with the inbound US cargoes is weighing things down thereby exacerbating the cargo / barge differential.

380cst: $468
(1.0%): $487
180cst: $486
(1.0%): $512
DMB: N/A
MGO 0.1%S: $735