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Technical indicators: neutral to bearish

Oil prices initially retreated during early morning trade, ICE Brent and Gasoil breaching first supports. Yet when WTI support at 92.80 dollars proved strong oil prices pared some of their earlier losses, additionally supported by the dollar losing ground after the Swiss National Bank's announcement to cut its interest rate target band. Investors look ahead to more US economic data and the DOE oil inventories, to be published in the afternoon.

After rising at the beginning of the session in New York, oil declined for a fourth day, its longest losing streak since May, as investors bet that signs of a slowing U.S. economy indicate fuel demand will drop. More disappointing indicators (consumer spending unexpectedly fell in June for the first time in almost two years) and the warning of Moody’s Investors Service that the nation’s credit rating may be downgraded on concerns that fiscal discipline will ease weighed heavily on the complex. Prices also declined after breaching technical support levels. Despite a modest recovery in late session, NYMEX crude settled at the lowest level in more than a month.

OPEC's latest statistics show that its members have significantly raised output in July, despite their consent to stick to the current quota ceiling. Total OPEC production reached a 3-year high of 30.4 million barrels a day (+600.000 bpd vs June), 350.000 barrels of which come from Saudi Arabia that is producing 9.8 mbpd, last done in the early 80's. Since March the cartel has raised output by around 1.8 mbpd, completely compensating the 1.5 mbpd lost through the Libyan war.

ICE gasoil for August delivery settled at 967.50 dollars on Tuesday. This was 3.25 dollars below Monday's settlement. With some 45,400 contracts the traded volume was slightly below average

The stochastic indicator at ICE is slightly bearish, while it rather is to be seen as neutral for the WTI Crude. Chart analysts thus consider the situation as bearish, even if NYMEX Crude Oil seems oversold already. According to analysts, tests of medium term supports are possible regarding ICE-futures, market participants might be cautious, however, waiting for the DOE data and US employment data to be published in the afternoon. Should these prove to be bearish and should ICE-futures breach their key supports, there will be new potential downward, rendering possible a correction regarding WTI crude down to the area of 90 dollars, analysts add. The first support for the WTI crude is seen at 92.80 dollars, its first resistance at 94.45 dollars. The Brent's first resistance is seen at 117.00 dollars, its first support is at 115.75 dollars.

U.S.

Nymex Access losing: Oil futures are losing in Asian trading and Globex electronic exchange on economic worries after a short recovery as a technical reaction to Tuesday's hefty losses. The traded volume is below average.

APIs: crude oil -3.3; distillates +1.4; gasoline +2.5 million barrels vs previous week. Refinery utilization +0.9%

DOEs: due out tonight.

Forecasts: Crude oil +1.0; distillates +1.4; gasoline -0.4 million barrels vs previous week

Houston (ex-wharf indications 2-8)

380 cst $673
180 cst $703
MDO $994

New Orleans (ex wharf indications 2-8)

380 cst $676
180 cst $607
MDO $998

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

Crude is losing still with WTI -$0.97. Singapore paper is mirroring crude, losing with -$4.80 for 180cst and -$5.00 for 380cst for Aug, and for Sep 180 cst -$4.75 and -$4.30 for 180cst with MGO Aug contracts at -$0.19 and for Sep at -$0.15. The cargo market is in line with crude and paper with 180cst -$5.51, 380cst -$4.99 and MGO -$3.94.

The Singapore fuel oil markets fell more than $5.00 during the Platts window.The delivered premiums remained around $5.50 above cargo prices. Bunker fuel swaps gained app. $2.00/mt along the curve both for Rotterdam and Singapore papers. This morning both markets are trading higher.

High premiums for prompt deliveries.

380 cst $677
180 cst $688
MDO $968

Fujairah (delivered indications 3-8)

380 cst $688
180 cst $721
MDO $1080

Rotterdam

Indications for delivered bunkers:

380cst : $ 663
(1.0 %) :$ 685
180cst: $ 690
(1.0 %):$ 714
MGO 0.1%S: $ 975