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Technical indicators: neutral

Oil prices traded in a narrow lateral range on their high level in early morning trading Wednesday, but were affected by the rising dollar still before midday. ICE gasoil and the brent breached first support lines. Still, the losses were limited at this time of the day, despite of a bunch of disappointing US data. The constantly recovering dollar seen as a safe haven in times of economic worries, along with a steep drop in European and US equities, eventually pushed the oil complex below important support lines, triggering even more selling orders. Not even the rather bullish DOE data made a difference. The significant cuts in crude oil which also affected Cushing oil stocks were seen as mainly caused by the shutdown of the Keystone pipeline and not by a rise in oil demand. Oil prices are marginally higher in East Asia and Globex electronic trading this morning in a technical reaction to Wednesday's hefty losses and somewhat supported by the unexpected draw in US crude stocks. The traded volume is on average. After a small upward correction in the morning oil prices are back down at midday on a constantly strong dollar. In the afternoon investors will eye the release of more US indicators for further direction.

ICE Gasoil contract for July delivery settled at 978,50 dollars on Wednesday. This was 13,50 dollars below Tuesday's settlement. With some 77.300 contracts, the traded volume was above average.

OPEC's move to leave output quota unchanged supported the oil complex end of last week, as the expected rise in oil demand in the third quarter of 2011 will lead to a supply shortage of up to 2 million bpd. Yet Saudi Arabia said it will boost output, despite the failure of the Organization of Petroleum Exporting Countries to approve such a move and other OPEC members are expected to follow in order to defend their market share.

The Stochastic indicator lost its bearish influence this morning and could turn bullish today should the red and the black line cross, triggering a buying signal. The uptrends are intact on all charts, providing more bullish momentum. Yet downward corrections are possible within the trendlines. The first support for the WTI crude is seen at 96.85 dollars, the first resistance at 100.00 dollars. Brent's first resistance is seen at 121.50 dollars, its first support is at 118.80 dollars.

IEA monthly energy outlook:

• global refinery crude demand stood at 72,6 mbpd in April.
• global refinery crude demand for July is seen at 76,4 mbpd.
• global crude demand for May 2011 stood at 87,68 mpbd, which is +0,27 mbpd vs. April
• global oil demand growth in 2011 revised upward by 0.1 million bpd
• 3rd quarter 2011 demand for OPEC oil seen rising by 1.5 million bpd
• Oil demand growth seen rising by 0,85 mill bpd until the year 2015

Euro zone economic indicators: Euro zone inflation dropped to 2.7% in May 2011 compared to 2.8% in April and 1.7% in May 2010.

Euro keeps falling on Greece's debt crisis The euro weakened further vs the U.S. dollar in morning trading, as fears over Greece's debt crisis and the possibility of contagion to other euro-zone countries dominated market sentiment. At midday the euro stood at 1,4100 dollars after reaching a three-week low at 1,4090 dollars in early morning trade. The Euro suffered considerable losses during yesterday's trade. On the one hand, investors preferred the USD, Yen and Swiss Frank after weaker-than-expected american economic data, on the other hand ongoing doubts about Grece's future is weighing heavily on the european common currency. The ECB, holding the most part of Grece`s bonds, still pleads against a rescheduling of debts, which is considered as default by ratings agencies.

As it might signal to other indebted countries like Portugal and Ireland that spending cuts could be avoided by rescheduling, a national bankruptcy of Greece is seen as "worst case" in the financial sector.

The Euro currently stands at 1,4119 Dollars and aims at the 1,41 Dollar mark. Supports are seen at 1,41 Dollars, at 1,40 Dollars and at 1,3790 Dollars. Resistances are at 1,42 Dollars, at 1,43 Dollars, at 1,4395 Dollars and at 1,4440 Dollars.

• US initial jobless claims dropped by 16,000 to 414,000 last week after 430,000 in the week before (revised figure). Consensus: 420.000
• US continuing jobless claims fell to 3,675,000. Economists expected a reading of 3.650.000
• U.S. current account stood at -119 billion dollars in the 1st quarter after a revised -112 billion dollars in the 4th quarter of 2010. Economists expected a reading of -130 billion dollars.• Construction of homes and apartments last month sank from a month earlier to a seasonally adjusted annual rate of 560,000. vs. 634,000 in April.
• New building permits dropped from a month earlier to an annual rate of 612,000. Economists expected 548,000 new permits.

U.S.

Nymex Access gaining. After the opening of NYMEX floor trade, oil futures are lifted by positive US economic data. However, prices have not yet reached previous intra-day highs again.

APIs: crude oil -3.0; distillates -0.4; gasoline +0.3 million barrels vs previous week. Refinery utilization -1.7%

DOEs: -3.4; distillates -0.1; gasoline +0.6 million barrels vs previous week. Refinery utilization -1.1%.

Forecasts: Crude oil +0.1; distillates +0.8; gasoline +0.3 million barrels vs previous week

Houston (ex-wharf indications 16-6)

380 cst $645
180 cst $675
MDO $1005

Very tight avails for 180 cst

New Orleans (ex wharf indications 16-6)

380 cst $647
180 cst $678
MDO $1009

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

Crude is losing on the back of the Greek crisis with WTI -$2.78. Singapore paper is reflecting the bearish sentiment, losing with -$11.70 for 180 cst and -$10.20 for 380 cst for Jul, and for Aug 180 cst -$11.70 and 380cst -$10.20 with MGO Jul contracts at -$3.78 and for Aug at -$3.77. The cargo market is in line with crude and paper, losing with 180cst -$5.94, 380cst -$5.79 and MGO +$0.35.

The Singapore fuel oil market was down around $6.00/mt during the Platts window yesterday tracking crude. Buying interest was slow and the Asian fuel oil crack spread weakened. The delivered premiums were assessed at around $8.00 above cargo prices yesterday. Bunker fuel swaps lost app. $6.00-7.50/mt along the curve in Rotterdam and a few more in Singapore. Losses were more pronounced in the front of the forward curve in both markets.

High premiums for prompt deliveries.

380 cst $656/657
180 cst $669
MDO $963

Fujairah (delivered indications 16-6)

380cst: $656
180cst: $686
MGO: $1030

Rotterdam

Indications for delivered bunkers:

The NWE market saw some diminished demand levels yesterday. Delivered 380cst product was assessed app.$7.00/mt down while cargo prices lost app. $9.00/mt. Suppliers in ARA continue to struggle with tight product avails especially for prompt deliveries.

380cst :$ 630
(1.0 %) :$ 690
180cst :$ 660
(1.0 %) :$ 709
MGO 0.1%S: $ 955