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Technical indicators: neutral ahead of stock report

Crude oil futures posted their biggest daily percentage gain in more than a month after market participants regarded US petroleum inventories as rather bullish. U.S. crude oil inventories rose by a smaller-than-expected 667,000 barrels and distillate stocks fell more than expected, according to the Department of Energy.

Oil prices are still in a downtrend and are seen falling as low as the long-term support line in the medium-term (the thought line starting from the low of 72,35 dollars seen in August, see chart below). Only if the WTI crude contract falls through 79,85 dollar support, will the downtrend become steeper (lilac line). RSI and Stochastic indicator are in neutral territory this morning. First WTI crude support line seen at 81.20 dollars today, first resistance line at 83.25 dollars. Oil prices will stay in a tight correlation with the dollar today, seen consolidating in the morning as investors will eye important US economy data in the afternoon that are expected to give further direction.

ICE Gasoil October is expected to open 0,25 to 1,75 dollars lower at about 705,00 dollars/ton after settling at 704,00 dollars (official settlement price) Wednesday night. This was 2,00 dollars above Tuesday's settlement. Volume with some 89,900 deals by far above average.

U.S.

Nymex Access : Oil futures are declining in Asian trading hours and NYMEX electronic trading this morning as the dollar re-strengthened, inspired by reported comments by U.S. Treasury Secretary Timothy Geithner (see dollar commentary). No news in the markets. The traded volume is far above average.

APIs: crude oil +2.315; distillates -0.854 ;gasoline -0.083 million barrels vs previous week. Refinery utilization +0.8 = 80.9%

DOEs: crude oil +0.667; distillates -2.155 ;gasoline +1.155 million barrels vs previous week. Refinery utilization +0.6 = 82.5%

Crude oil +2.4; distillates -0.9; gasoline -1.3 million barrels vs previous week. Refinery utilization: unchanged;

Houston (ex-wharf indications 20-10)

380cst: $467
180cst: $487
MGO: $745

Very tight avails for 180cst

New Orleans (ex-wharf indications 20-10)

380cst: $468
180cst: $488
MGO: $749

Singapore (correct as of 1430hrs local time)

Crude is bouncing back after the drop with WTI +$1.07. Singapore paper is reacting with 180cst +$7.45 and 380cst +$5.75 for Nov, and Dec 180 cst +$7.60 and 380cst +$5.75 with MGO Nov contracts +$1.29 and for Dec at +$1.28. The cargo market is jsut reacting to the drop prior to bounce with 180cst -$6.04, 380cst -$6.09 and MGO -$1.72.

The Singapore fuel oil markets lost more than $6.0/mt tracking strengthening crude during the window. The Asian fuel oil crack also strengthened as heavy speculative buying supported the market. The delivered bunker premiums hovered as previous day; ranging $1.5 to $2.0 above cargo prices yesterday.

High premiums for prompt deliveries:

380cst: $479
180cst: $469
MGO: $707

Fujairah (delivered indications 21/10)

380cst: $476
180cst: $490
MGO: $740

Rotterdam

Yesterday (Only barge trade deals of >2 KT reported) 60KT was traded in the MOC between 448,50-450 with Litasco as the main seller to Gunvor as the main buyer.

Low sulfur fuel oil prices in Northwest Europe picked up as traders held back from selling the oil prompt electing instead to store it, market sources said Wednesday. The 1% fuel oil market contango spread balance October to November was seen at minus $4.75/mt Wednesday, Platts data showed, and market sources said that at these levels it was more economical to employ a cash-and-carry move. Some other sources noted, however, that fundamentals would remain under pressure from arbitrage inflows from the Americas. The Med-NWE physical differential is poised to widen given the Med’s growing length—underscored by the physical assessment dipping below swaps—and NWE’s anticipation of an arbitrage opening to Singapore.

380cst: $455
(1.0%): $478
180cst: $470
(1.0%): $496
DMB: N/A
MGO 0.1%S: $718