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Technical indicators: bearish

Oil prices fall further as the bearish IEA report and the bolstering dollar keep weighing on the oil complex. European equity markets suffer from this latest downward correction and fell after the opening.

Yesterday prices traded in a narrow range on their high level in electronic morning trading, hitting first resistance lines that proved strong. The rising US dollar tempted traders to take profit and oil prices edged lower after the opening of the session in New York. Oil futures then collapsed after the release of the DOE report (WTI crude tumbled over 4 percent, falling below its 100.00 dollar support) after an unexpected rise in gasoline stocks and concerns about slowing demand triggered a selloff across the oil complex. CME even suspended trading of gasoline, crude and heating oil on the NYMEX for five minutes starting at 5:06 p.m. after the June-delivery gasoline contract fell over 25 dollars, the daily limit. Limits were doubled after the resumption of trading and market participants kept sellling their long positions, pushing prices even lower in late NYMEX session. Due to the high volatility over the past 10 days, a measure of price swings, CME raised contract margins on the fuel for the second time this week.

OPEC oil production fell by 235,000 barrels a day in April and remains 1.3 million barrels a day below its level in January, before the conflict began in Libya. "Libyan supply will remain absent from the market for the rest of 2011," the IEA said. A production increase at the June OPEC meeting is unlikely given the unusual level of agreement between the most hawkish members of the group, such as Iran, and the doves, such as Saudi Arabia. "There appears a near-unanimous consensus among OPEC members that supplies to the market are adequate," the IEA stated.

ICE Gasoil contract for May delivery settled at 932.25 dollars Wednesday night. This was 9.00 dollars below Tuesday's settlement. Volume with some 48,200 deals slightly below average. The contract expires today.

Even though the Stochastic indicator's buying signal at the brent, the indicator remains bullish. The RSI at the brent chart crossed the 30% line, while the one at the WTI and the gasoil chart are about to breach the line, which would trigger more technical buying orders. Therefore technical analysts are still bullish today, even though prices will stay rangebound ahead of the release of DOE data in the afternoon. The first support for the WTI crude is seen at 103.00 dollars, the first resistance at 104.60 dollars. The Brent's first resistance is seen at 119.25 dollars, its first support is at 117.00 dollars.

U.S.

Nymex Access losing. Oil futures slipped again after a short recovery in East Asia and Globex electronic trading this morning as demand concerns linger. The traded volume is above average.

APIs: crude oil +2.9; distillates +0.6; gasoline -1.8 million barrels vs previous week. Refinery utilization +/- 0.0%

DOEs: due out tonight.

Forecasts: crude oil +1.1; distillates +0.7; gasoline -0.2 million barrels vs previous week. Refinery utilization +0.7%

Houston (ex-wharf indications 11-5)

380 cst $626
180 cst $661
MDO $954

Very tight avails for 180 cst

New Orleans (ex wharf indications 11-5)

380 cst $628
180 cst $663
MDO $958

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

Crude is turning bearish, losing with WTI -$6.47 Singapore paper is dropping as well with -$25.10 for 180 cst and -$24.55 for 380 cst for May, and for Jun 180 cst -$25.05 and 380cst -$24.95 with MGO May contracts at -$5.00 and for Jun at -$5.01 The cargo market is slowing, but not yet turning again with 180cst +$4.71 380cst +$5.43 and MGO +$1.98.

The Singapore fuel oil markets extended its gain by another $5.0 yesterday during the Platts window tracking crude. The bunker delivered premiums were remained at around $7.5 above cargo prices yesterday as sellers are holding their prices despite sufficient avails. Bunker fuel swaps following general trend in the market lost app. $8.00-9.00/mt along the curve both in Rotterdam and Singapore. Losses were slightly more pronounced in the front of the curve for both papers. This morning both markets are trading lower.

High premiums for prompt deliveries.

Fujairah (delivered indications 12-5)

380cst: $652
180cst: $677
MGO: $1046

Rotterdam

Yesterday in the MOC hsfo was traded between 613-617 usd and lsfo between 644-651 usd.

Indications for delivered bunkers:

380cst: $606
(1.0%): $655
180cst: $627
(1.0%): $679 (very low avails)
MGO 0.1%S: $919 380 cst $630 180 cst $642 MDO $935