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Technical indicators: neutral to bullish

After a consolidation in morning trading, oil prices are seen edging higher later in the day, still supported by the ailing dollar, the high draws in US gasoline stocks ahead of the summer driving season and the rather bullish technical constellation. Market participants see no speedy recovery of the US currency, the FED sticking to its low-interest policy with no time limit in sight. The spread between the brent and the WTI crude widened to over 12.40 dollars, the WTI being pressured by the high build in US crude stocks.

After a strong performance in electronic trading Yesterday, oil prices dropped short before the release of US petroleum inventories when traders liquidated their long positions in expectation of the data giving bearish signals. The unexpected high build in crude stocks then gave more bearish momentum. But traders quickly changed their minds and bet on rising prices as the high draw in product stocks suggested rising demand. WTI crude even rose above 113.00 dollars for a barrel to the highest since 2008 after Federal Reserve Chairman Ben Bernanke's comments suggested a continued loose monetary policy for an extended period that is apt to maintain pressure on the dollar in the process of boosting equities and assets such as oil.

OPEC members with spare capacity are ready to pump above agreed limits if there is a need, but it seems unlikely that a formally change of output targets will be announced at the next meeting in June. In February top producer Saudi Arabia raised output above 9 million barrels per day, around a million bpd more than its OPEC output limit, in response to supply disruption in OPEC member Libya that drove oil prices to their highest since the record rally of 2008. But in March, Saudi Arabia scaled back to around 8.3 million bpd.

ICE Gasoil contract for May delivery settled at 1,024.25 dollars Wednesday night. This was 6.50 dollars above Tuesday's settlement. Volume with some 53,600 deals on average.

Medium- and long-term uptrend channels are still intact on all charts. The Stochastic indicator on the gasoil, WTI and brent chart is still bearish this morning while the RSI on the WTI crude chart has not yet given any selling signals. Therefore, technical analysts see prices consolidating above the 111.00 dollar support of the WTI crude. As long as prices trade above this level, no technical selling orders will be triggered, so analysts. The first support for the WTI crude is seen at 111.60 dollars, the first resistance at 112.65 dollars. The Brent's first resistance is seen at 124.40 dollars, its first support is at 123.50 dollars.

U.S.

Nymex Access gaining. Oil prices are strong in East Asia and Globex electronic trading this morning on speculation fuel demand will increase after the FED and as U.S. gasoline stockpiles fell to the lowest since August 2009. The ailing dollar also lends support. The traded volume is on average.

APIs: crude oil +4.9; distillates +1.5; gasoline -2.1 million barrels vs previous week. Refinery utilization -0.7%

DOEs: crude oil +6.1; distillates -1.8; gasoline -2.5 million barrels vs previous week. Refinery utilization +0.2%

Forecasts: crude oil +1.1; distillates +0.6; gasoline -1.0 million barrels vs previous week. Refinery utilization +1.0%

Houston (ex-wharf indications 27-4)

380 cst $664
180 cst $699
MDO $1021

Very tight avails for 180 cst

New Orleans (ex wharf indications 27-4)

380 cst $664
180 cst $699
MDO $1021

Singapore (correct as of 1430hrs LT - delivered indications)

Crude is starting to turn with WTI +$1.10 Singapore paper is reacting to crude with +$8.75 for 180 cst and +$8.55 for 380 cst for May, and for Jun 180 cst +$8.75 and 380cst +$8.25 with MGO May contracts at +$1.80 and for Jun at +$1.76 The cargo market is reflecting the bearish note the week started on with 180cst -$5.47, 380cst -$3.20 and MGO -$0.45.

The Singapore fuel oil markets were down $ 3.00-5.00 Yesterday during the Platts window despite the flattish crude. The Asian fuel oil crack weakened further as suppliers were pretty aggressive. The bunker delivered premiums came off slightly, app. $4.50 above cargo prices Yesterday. Bunker fuel swaps gained app. $2.50-4.00 along the curve both in Rotterdam and Singapore. Forward curve remains strongly backwardated with 2012 prices trading well below spot and front month figures. This morning both markets are trading higher.

High premiums for prompt deliveries.

380 cst $676
180 cst $682
MDO $1053

Fujairah (delivered indications 28-4)

380cst: $682
180cst: $708
MGO: $1047

Rotterdam

Indications for delivered bunkers:

In the MOC yesterday 641.50-644 were done on 3.5%S with 692-701 on the 1%S.

380cst: $649
(1.0%): $709
180cst: $680
(1.0%): $738 (very low avails)
MGO 0.1%S: $1029