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Technical indicators: neutral

Oil prices are gaining ground in electronic trading and first resistance lines were breached across the complex as the dollar lost vs the euro after strong U.S. data Tuesday and better-than-expected Chinese manufacturing data overnight boosted risk sentiment and investors fled the dollar as a safe-haven-currency.

Oil prices kept falling in late New York session and after-hour trading amid concern Europe’s debt crisis may crimp economic growth and demand for fuel and as the dollar gained to it's highest in more than 10 weeks against the euro as Portuguese, Italian and Spanish government bonds slumped and global stocks slipped.

ICE gasoil December is expected to open 3.50 to 5.00 dollars down at about 725.00 dollars/ton after settling at 729.25 dollars (official settlement price) Tuesday night. This was 5.25 dollars below Monday's settlement. Volume with some 50,900 deals on average.

Oil prices dropped Tuesday when the expected technical downward correction was triggered as the red and the black line of the Stochastic indicator crossed, giving a selling signal. Yet the short-term uptrend is still intact. The RSI is still in neutral territory, giving no clear signals. The first support for the WTI crude at 83.60 dollars is seen strong today, the first resistance at 85.00 dollars.

U.S.

Nymex Access : Oil prices are gaining ground in Asian trading hours and NYMEX electronic trading this morning, paring some of last night's losses in a technical reaction after NYMEX crude support at 83.60 dollars proved strong in New York trading. No news in the markets. The traded volume is above average.

APIs: crude oil -1.141; distillates +0.224, gasoline +1.069 million barrels vs previous week. Refinery utilization -1.7%

DOEs: due out tonight.

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

Houston (ex-wharf indications 30-11)

380cst: $477
180cst: $497
MGO: $763

Very tight avails for 180cst

New Orleans (ex-wharf indications 30-11)

380cst: $479
180cst: $500
MGO: $766

Singapore (correct as of 1430hrs local time)

Crude is starting to lose after it's bullish run with WTI -$0.56. Singapore paper is mirroring crude with 180cst -$3.75 and 380cst -$3.70 for Dec, and Jan 180 cst -$3.55 and 380cst -$3.70 with MGO Dec contracts -$0.94 and for Jan at -$0.99. The cargo market is slowing with 180cst +$2.89, 380cst +$3.05 and MGO +$0.72.

Asian fuel oil was steady on Tuesday, supported by speculators buying up heavy volumes of the fixed-price December contract amid rising crude benchmarks for a second straight session. December/January fell 13 cents to a backwardation of $1.38/mt and bids/offers last seen at $1.25/$1.50 after the close. The Singapore bunker differential, the price spread between ex-wharf marine fuel prices and fuel oil cargo values, was stronger at a premium of $2.88/mt, up $1.01, with bunker fuel prices rising $4.00 to $501.00/mt.

High premiums for prompt deliveries:

380cst: $496
180cst: $508
MGO: $728

Fujairah (delivered indications 1/12)

380cst: $490

180cst: $527
MGO: $760

Rotterdam

Yesterday (Only barge trade deals of >2 KT reported) 110KT was traded between 466.00-476.75 with Koch and Cargill as the main sellers to Litasco as the main buyer.

The NWE HSFO markets continue to firm, as the Eastern Arbitrage is open now. The Front Crown was reported being fixed for for early December loading, now the Kazimah III is also fixed for end December loading, with two more VLCC's reported fixed. The Singaporean markets are seen 60 cents in normal backwardation. The HSFO Med markets are oversupplied and sluggish, with cargoes to NWE starting to become more attractive. For the LSFO there are some cargoes seen moved from NWE to the Med, although the arbitrage is not considered to be open yet. The NWE LSFO markets are well supplied, with stored product entering the market and product arriving out of the US.

380cst: $479
(1.0%): $485
180cst: $485
(1.0%): $502
DMB: N/A
MGO 0.1%S: $733