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Technical indicators: neutral to bullish

Oil prices are seen slightly up today, driven by technical buying orders and a slipping dollar, but gains will be limited in electronic trading as market participants are being cautious ahead of the release of US petroleum inventories. Should the DOE confirm the high draw in oil products and Cushing inventories reported by the API, more buying orders are triggered and more resistance lines are going to be breached.

Yesterday, oil prices edged higher in electronic morning trading, hitting intraday highs at noon, supported by a weaker dollar. The bearish market sentiment and worse-than-expected data on the US housing market weighed on prices in the afternoon. The downward momentum picked up speed after the opening of the session in New York when more disappointing US indicators hit the market and technical selling orders were triggered, in the course of which several support lines were breached and the collapse accelerated. A weaker dollar, the increase in US gasoline use as per MasterCard Spending Pulse and the unexpected drop in US fuel stocks as per API helped prices up in late NYMEX session and after-hour trading.

ICE Gasoil contract for June delivery settled at 890.50 dollars Tuesday night. This was 33.50 dollars below Monday's settlement. Volume with some 77,100 deals well above average.

The Stochastic indicator at all charts is still seen slightly bearish this morning, the RSI gives a buying signal. ICE gasoil and the WTI crude hit their first resistance lines that prove strong for the time being. Should these be breached, the Stochastic would give a buying signal and technical buying orders would be triggered. Yet investors are still looking for direction and will therefore eye the foreign exchange market and the release of DOE petroleum inventories later today for development of oil prices. The first support for the WTI crude is seen at 95.60 dollars, the first resistance at 98.00 dollars. The Brent's first resistance is seen at 111.80 dollars, its first support is at 108.80 dollars.

U.S.

Nymex Access losing. Oil prices trade in a narrow range in East Asia and Globex electronic trading this morning, after their recovery from three-month lows last night in New York, as traders are being cautious ahead of the release of DOE data in the afternoon.The traded volume is slightly above average.

APIs: crude oil +2.7; distillates -2.8; gasoline -0.7 million barrels vs previous week. Refinery utilization -0.5%

DOEs: due out tonight.

Forecasts: crude oil +2.7; distillates -2.8; gasoline -0.7 million barrels vs previous week. Refinery utilization -0.5%

Houston (ex-wharf indications 17-5)

380 cst $622
180 cst $656
MDO $948

Very tight avails for 180 cst

New Orleans (ex wharf indications 17-5)

380 cst $625
180 cst $660
MDO $951

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

Crude is slowing, losing only with WTI -$0.09 Singapore paper is mirroring crude, slowing with -$3.10 for 180 cst and -$2.75 for 380 cst for Jun, and for Jul 180 cst -$3.05 and 380cst -$1.75 with MGO Jun contracts at -$0.55 and for Jul at -$0.52 The cargo market is starting to refect the bearish start of the week, losing with 180cst -$4.37 380cst -$4.79 and MGO -$1.16.

The Singapore fuel oil markets reopen today after a one day break due to public holiday. The fuel oil fell more than $4.00 during the Platts window on Monday and the fuel oil market has been pretty supportive, firming up the Asian crack spread. Bunker fuel swaps lost app. $20.00-22.00/mt along the curve both for Rotterdam 3.5% Barges FOB and Singapore 180cst Cargo FOB. Losses were more pronounced in the front of the forward curve while backend lost a dollar less. Both markets remain in backwardation with Cal 12 papers assessed at the discount ranging at $15.00-20.00/mt versus spot prices. This morning both markets are trading higher.

High premiums for prompt deliveries.

380 cst $634
180 cst $644
MDO $930

Fujairah (delivered indications 17-5)

380cst: $640
180cst: $662
MGO: $1036

Rotterdam

Yesterday in the MOC hsfo was traded between 613.50-616.25 usd and lsfo between 638-641 usd.

Indications for delivered bunkers:

380cst: $608
(1.0%): $638
180cst: $629
(1.0%): $665 (very low avails)
MGO 0.1%S: $919