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Technical indicators: neutral to bearish immediate term / bullish medium term

The dollar fell this morning vs. the euro after a Moody's warning on the United States' credit rating but resilience in U.S. Treasuries suggested bond investors expected lawmakers to ultimately raise the county's debt ceiling in time to avoid default. The weak dollar gave the euro a slight reprieve although a looming Italian bond auction kept investors worrying.

After the small losses at the beginning of the week, oil prices have consolidated at ICE and NYMEX on Wednesday morning. Ahead of the DOE data which were to be published later that day, some short positions had been liquidated. Prices edged higher until the afternoon on a retreating dollar, but upward potential was limited by investors waiting for new data. Only when the bullish US oil inventories had been published, oil prices have breached resistances sustainedly, triggering technical buying orders which lifted oil futures to new highs in the evening. Yet, given the decrease in US demand of products, the DOE's data are not as bullish as the mere figures regarding crude stocks may lead to expect. Speculators thus seized the steady level of prices to take short term profits by selling during electronic trading later in the evening. Oil futures returned from their intra-day highs again, still settling significantly higher.

ICE Gasoil contract for August settled at 983.00 dollars on Wednesday. This was 16.00 dollars above Tuesday's settlement. With some 77,000 contracts, the traded volume was above average.

The stochastic indicator for the WTI Crude has already turned direction again, giving markets a buying signal. Regarding ICE Brent and Gasoil, the indicator shows no clear signals up to now. Thus chart analysts still regard the current situation as neutral and see ICE Brent's key resistance at the mark of 120 dollars. Only if this line is breached, further upward potential will be created. Today's range will still be defined by the short-dated up trends of Brent and Gasoil. The first support for the WTI crude is seen at 96.50 dollars, its first resistance at 99.20 dollars. The Brent's first resistance is seen at 120.00 dollars, its first support is at 117.20 dollars.

U.S.

Nymex Acces losing. Oil futures slightly retreat during electronic morning trading. Some profit taking already made them come back from their intra-day highs during late trade yesterday. The volume traded at NYMEX is slightly below average this morning. Investors wait for the opening of the European markets, for further impetus from foreign exchange and for US employment data.

APIs: crude oil +2.3; distillates +4.8; gasoline -1.6 million barrels vs previous week. Refinery utilization -1.4%

DOEs: crude oil -3.1; distillates +3.0; gasoline -0.8 million barrels vs previous week. Refinery utilization -0.4%

Forecasts: Crude oil -1.7; distillates +0.2; gasoline +/- 0.0 million barrels vs previous week

Houston (ex-wharf indications 13-7)

380 cst $651
180 cst $682
MDO $998

Very tight avails for 180 cst

New Orleans (ex wharf indications 13-7)

380 cst $653
180 cst $684
MDO $1001

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

Crude is back on its bullish track, gaining with WTI +$0.62. Singapore paper is mirroring it with +$4.05 for 180 cst and +$2.00 for 380 cst for Jul, and for Aug 180 cst +$3.10 and 380cst +$1.85 with MGO Jul contracts at +$0.20 and for Aug at +$0.21. The cargo market is fully adopting bullishness with 180cst +$12.01, 380cst +$11.72 and MGO +$2.09.

The Singapore fuel oil markets surged by more than $12.00 during the Platts window yesterday, lifted by stronger crude closing. The higher outright prices yesterday have discouraged buying and sellers were aggressive on soft demand. The delivered premiums slipped to around $6.50 above cargo prices yesterday. Bunker fuel swaps gained app. $9.00/mt along the curve both for Rotterdam and Singapore papers. Gains were slightly more pronounced at the back end of the forward curve. This morning both markets are trading higher.

High premiums for prompt deliveries.

380 cst $671
180 cst $684
MDO $975

Fujairah (delivered indications 14-7)

380cst: $674
180cst: $705
MGO: $1061

Rotterdam

Indications for delivered bunkers:

380cst :$ 650
(1.0 %) :$ 713
180cst :$ 675
(1.0 %) :$ 736
MGO 0.1%S: $ 976