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As expected, oil prices were in a narrow range due to the lack of any fundamental news, hitting support lines a couple of times but never falling through. The WTI crude dropped to its lowest level since August 26. Only during NYMEX session did prices get a boost by a better-than-expected ISM index, but shed their gains short after as the indicator is not of much importance.

Responsible for the strong rebound in late NYMEX session were comments of Federal Reserve bankers released in the minutes of meetings on the central bank's discount rate. According to these minutes, the U.S. economy doesn't appear to be entering a new recession and the end of temporary drags on growth should help provide a boost for the remainder of the year. The Federal Reserve is being watched closely to see if it takes any additional action in the face of a sagging U.S. economy.

Expectations of a draw in US crude oil and product stocks due to oil rigg evacuations and refinery shutdowns in the forefront of tropical storm Lee also lent support. The oversold technial situation gave additional impetus. The Brent-WTI spread reached a new record of almost 27,00 dollars. After the opening of European markets and given the positive development in Asian trade, oil futures have gained ground at ICE and NYMEX in the morning, marking new highs. Ahead of US inventories data to be published in the afternoon upward potential is limited.

ICE gasoil for September delivery is expected to open 12,00 to 13,00 dollars up at about 952,50 dollars/ton after settling at 939,25 dollars Tuesday night. This was 5,25 dollars above Monday's settlement. Volume with some 38.400 contracts below average.

U.S.

Nymex Access gaining: Oil futures are trading modestly higher in East Asia and Globex electronic trading this morning, taking their breath after Tuesday's late rally. In the absence of any important economic indicators, market participants will eye the dollar and equity markets for direction. The traded volume is below average.

Houston (ex-wharf indications 6-9)

380cst $630
180cst $674
MGO $960

Very tight avails for 180 cst

New Orleans (ex-wharf indications 6-9)

380cst $633
180cst $679
MGO $965

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

Crude seems to have hit the bottom of the curve and is now rallying with WTI +$1.76. Singapore paper is reflecting the move up sharply now with +$18.80 for 180cst and +$18.25 for 380cst for Sep, and for Oct 180 cst +$17.75 and +$16.75 for 180cst with MGO Sept contracts at +$2.40 and for Oct at +$2.14. The cargo market bottoming out now as it lags behind is reflecting yesterday's drops fully now, losing with 180cst -$0.23, 380cst +$0.15 and MGO -$0.56.

The Singapore fuel oil markets did not have much change; was flat during the Platts window. Bunker demand was said to be generally average. The delivered bunker premiums were around $6.50 above cargo prices yesterday.

High premiums for prompt deliveries.

380 cst $642
180 cst $686
MGO $945

Fujairah (delivered indications 7-9)

380cst $665
180cst $685
MGO $1070

Rotterdam

Indications for delivered bunkers:

380cst : $ 646
(1.0 %) :$ 666
180cst: $ 676
(1.0 %):$ 696 MGO 0.1%S: $ 956