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Technical indicators: neutral to bullish

Oil prices pared earlier losses in after-hours trading last night when investors focused on higher-than-expected draw in US product stocks and positive US economy data, erasing the bearish impact of a high rise in crude oil stocks. A technical triangle is beginning to form, see graph below. Both Stochastic and RSI are still in neutral territory this morning. Should the red and the black line of the Stochastic indicator cross, this will give markets a bearish signal. First WTI crude support line seen at 80.65 dollars today, first resistance line at 82.60 dollars. Analysts see oil prices stay in a tight range within first resistance and first support line before the weekend (the technical triangle). Only very positive economy data would help prices beyond the strong resistance.

ICE Gasoil October is expected to open 7,25 to 8,75 dollars higher at about 704,00 dollars/ton after settling at 696,00 dollars (official settlement price) Wednesday night. This was -14,25 dollars vs Tuesday's settlement. Volume with some 44,200 deals on average.

New home sales in September continued their rise from a rock-bottom level. Sales increased 6.6% from the previous month, to a seasonally adjusted annual rate of 307,000. Economists had estimated sales would go up by 4.2% in September to 300,000. Durable-goods orders increased by 3.3% to a seasonally adjusted 199.16 billion dollars in September, the biggest rise since January, after -1.5% in August. Economists expected a 2.5% rise.

U.S.

Nymex Access : Oil prices are little changed in Asian trading hours and NYMEX electronic trading this morning, taking a breath after yesterday's late gains. Investors are sitting on the sidelines, so analysts. No news in the markets. The traded volume is on average.

APIs: crude oil +6.432; distillates +0.818 ;gasoline -1.805 million barrels vs previous week. Refinery utilization +0.7 = 81.6%

Doe's: crude oil +5.007; distillates -1.613 ;gasoline -4.387 million barrels vs previous week. Refinery utilization +1.2 = 83.7%

Forescasts: crude oil +0.6; distillates -0.6; gasoline -0.2 million barrels vs previous week. Refinery utilization: +0.4%;

Houston (ex-wharf indications 27-10)

380cst: $463
180cst: $483
MGO: $746

Very tight avails for 180cst

New Orleans (ex-wharf indications 27-10)

380cst: $465
180cst: $485
MGO: $750

Singapore (correct as of 1430hrs local time)

Crude is coming back slightly although still in negative territory with WTI-$ 0.13. Singapore paper is already back in the plus this 180cst +$2.30 and 380cst +$2.80 for Nov, and Dec 180 cst +$2.30 and 380cst +$2.70 with MGO Nov contracts -$0.30 and for Dec at+$0.31. The cargo market is also starting to come back with 180cst -$1.36, 380cst -$0.82 and MGO -$0.34.

The Singapore fuel oil prices fell app. $1/mt during the Platts window yesterday. Singapore 380 cst bunkers grade was assessed $1/mt down from previous close while cargo offers ranged in the area of $471-473/mt.

High premiums for prompt deliveries:

380cst: $470
180cst: $480
MGO: $698

Fujairah (delivered indications 28/10)

380cst: $470
180cst: $490
MGO: $735

Rotterdam

Yesterday (Only barge trade deals of >2 KT reported) 98 KT was traded in the MOC between 442,25-449,00 with Litasco as the main seller to Gunvor and Petroned as the main buyers.

Arbitrage flows from the US were slower compared with the third quarter, but one trader said there is still 200kt at least expected per month in Q4. Shell is believed to hold a term contract for ex-US LSFO through Q4 2010 and part of that oil was being channeled into NWE. Arbitrage economics from the US to the ARA region, however, remained negative. Some flows from South America in the short term can also be expected, especially if the US market weakens. The latter was currently seeing hi-los at about $21.50/mt. In the NWE HSFO market, meanwhile, Singapore arbitrage economics were close to workable as the East-West differential was seen to be widening and this could tighten fundamentals in the short-term. Therefore, expectations are for arb activity at the end of the week / early next week. The HSFO barge crack moved into minus $11/barrel territory for the first time since October 7, Platts data shows.

380cst: $457
(1.0%): $478
180cst: $472
(1.0%): $496
DMB: N/A
MGO 0.1%S: $710