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Technical indicators: neutral to bullish

After having breached the first resistance lines at ICE in the early morning, oil futures came back from their highs but remained on a higher level than Wednesday. Market participants wait for US economic data and particularly for the ECB's decision on interest rates. Furthermore the DOE data are due at 5 p.m.. According to the API data published yesterday, oil inventories in the USA have dropped more than expected in the last week. Analysts say, this might implicate a higher demand for oil in the USA.

During Wednesday's early morning trade oil futures traded higher, following the bullish technical momentum. Prices changed direction on China's announcement to raise interest rates. Market participants expect this restrictive monetary policy to slow down China's economic growth and to decrease Chinese oil demand. The weak Euro also weighed on oil prices until the opening of NYMEX floor trading. With important data due on Thursday and Friday, investors liquidated larger short positions. The worse-than-expected American ISM non-manufacturing index made oil futures retreat for a short term, the Spending Pulse published later in the evening as well as the oil inventories according to the API were seen as clearly bullish, however, lifting oil futures at ICE and NYMEX once more.

ICE Gasoil contract for July settled at 929.50 dollars on Wednesday. This was 1.00 dollar above Tuesday's settlement. With some 44,400 contracts, the traded volume was slightly below average.

The stochastic indicator remains slightly bullish for the ICE, whereas for the WTI there are no clear signals. There is an overbought situation throughout the complex, raising the probability for a short-term downward reaction, the technical outlook, however, remains slightly bullish. After WTI crude had already breached its key resistance at 95.85 dollars at the beginning of the week, providing for new upward potential, ICE Gasoil and Brent are close to testing their key resistances at 938.25 dollars, resp. 114.45 dollars. According to analysts, voluminous buying orders are to be expected, should prices transgress these lines. The first support for the WTI crude is seen at 95.90 dollars, its first resistance at 97.80 dollars. The Brent's first resistance is seen at 114.45 dollars, its first support is at 111.90 dollars.

U.S.

Nymex Acces gaining. Oil futures trade slightly higher during electronic morning trading. Particularly NYMEX Crude Oil is on a higher level, reacting to last night's bullish API data. The volume traded at NYMEX is slightly below average. Investors wait for the opening of the European markets and for US employment data and oil inventories according to the DOE.

APIs: crude oil -3.2; distillates -1.6; gasoline -1.9 million barrels vs previous week. Refinery utilization -0.2%

DOEs: due out tonight.

Forecasts: Crude oil -2.4; distillates +0.9; gasoline +0.2 million barrels vs previous week

Houston (ex-wharf indications 6-7)

380 cst $642
180 cst $672
MDO $954

Very tight avails for 180 cst

New Orleans (ex wharf indications 6-7)

380 cst $644
180 cst $675
MDO $958

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

Crude is bullish still, but slowing with WTI +$0.86. Singapore paper is reflecting the turn, gaining with +$7.10 for 180 cst and +$7.80 for 380 cst for Jul, and for Aug 180 cst +$7.20 and 380cst +$8.75 with MGO Jul contracts at +$1.80 and for Aug at +$1.85. The cargo market is starting to react to crude and paper, gaining with 180cst +$8.92, 380cst +$6.86 and MGO +$1.21.

The Singapore fuel oil markets lost another -$5.0/mt during the Platts window yesterday. The delivered premiums hovered around $11.5/mt above cargo prices as softer outright prices attracted some buying interest. Bunker fuel swaps were assessed higher gaining steadily during the day Yesterday. Gains were more pronounced at the far end of the forward curve. As a result time spread between front month and calendar 2012 lost approximately one dollar. Singapore market was a little stronger compared to Barges adding $1 to East/West. This morning markets are trading lower.

High premiums for prompt deliveries.

380 cst $662
180 cst $672
MDO $947

Rotterdam

Indications for delivered bunkers:

380cst :$ 633
(1.0 %) :$ 695
180cst :$ 651
(1.0 %) :$ 715
MGO 0.1%S: $ 947