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Technical indicators: bullish

After the contract of gasoline in New York had already gained considerable ground last night on API data published yesterday evening, oil prices at ICE have breached first resistance lines during morning trade. The recovering euro has given additional support. The European common currency advanced considerably, after the Swiss National Bank ( SNB ) announced it would significantly increase liquidity on the finance market again to weaken the Swiss Franc. Until the publication of the DOE's data in the afternoon, oil futures' gains should be limited, however, by WTI Crude's strong resistance at 88.00 dollars. The surprisingly high builds in crude oil forecast by the API weighs on the contract.

Yesterday, oil prices fell in electronic trading, weighed down by the strong performance of the US dollar and a weak opening of European equity markets that were paralyzed by figures showing euro zone economy slowed sharply in the second quarter, hobbled by sluggish growth in Germany and stagnation in France . With the opening of the session in New York , better-than-expected U.S. industrial production numbers helped bolster sentiment. While French President Nicolas Sarkozy and German Chancellor Angela Merkel met, volatility at the equity and commodity markets rose. But the meeting didn't result in any concrete measures to try and find a way out of Europe 's sovereign debt problems. The API numbers released later in the evening were quite supportive in after-hour trading as oil product supplies have come down sharply.

ICE gasoil for August delivery settled at 927.50 dollars on Tuesday. This was 4.75 dollars above Monday's settlement. With some 64,400 contracts the traded volume was slightly above average.

The RSI indicator had crossed the 30% line at all charts Monday, giving markets a strong buying signal. The Stochastic indicator stays slightly bullish but has meanwhile entered overbought territory, paving the way for a technical upward correction. But the uptrend being regarded as strong, technical analysts see oil prices ranging within the boundaries of their uptrend channels also today. The first support for the WTI crude is seen at 85.40 dollars, its first resistance at 88.05 dollars. The Brent's first resistance is seen at 110.00 dollars, its first support is at 107.50 dollars.

U.S.

Nymex Access gaining: Oil futures are trading higher in a volatile market in East Asia and Globex electronic trading this morning, the Brent staying above 109.00 dollars for a barrel, pushed up by dollar weakness and strong Asian equity markets. Last night's rather bullish API data also lend some support. The traded volume is below average.

APIs: crude oil +1.7; distillates -1.3; gasoline -5.4 million barresl vs previous week. Refinery utilization +0.5%

DOE's: due out tonight

Forecasts: crude oil +0.4; distillates +0.7; gasoline -1.3 million barrels vs previous week.

Houston (ex-wharf indications 15-8)

380 cst $626
180 cst $662
MDO $938

New Orleans (ex wharf indications 15-8)

380 cst $628
180 cst $664
MDO $941

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

Crude is continuing it bullish run, but slowing somewhat with WTI +$0.51. Singapore paper is more bullish, gaining with +$9.25 for 180cst and +$9.70 for 380cst for Sep, and for Oct 180 cst +$8.05 and +$9.70 for 180cst with MGO Sept contracts at +$1.33 and for Oct at +$1.33. The cargo market is in line with the bullish sentiment, gaining with 180cst +$6.43, 380cst +$8.01 and MGO +$0.27.

The Singapore fuel oil markets were up $8.00- 6.00 during the Platts window yesterday tracking crude. The Asian Fuel Oil cracks narrowed yesterday as fundamentals were tightening. The delivered premiums were around $10.0 above cargo prices yesterday. Bunker fuel swaps gained in a range of $9.50-6.50 along the curve both for Rotterdam and Singapore papers with gains slightly higher at the front of the forward curve. This morning both markets are trading slightly higher.

High premiums for prompt deliveries.

380 cst $658
180 cst $667
MDO $917

Fujairah (delivered indications 17-8)

380 cst $668
180 cst $697
MDO $1057

Rotterdam

Indications for delivered bunkers:

380cst : $ 633
(1.0 %) :$ 665
180cst: $ 659
(1.0 %):$ 692
MGO 0.1%S: $ 945