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Oil prices fell in early morning trading, market participants eyeing the development of the euro and equity markets for direction. European stocks initially traded lower, as investors reacted to the large gains of the last couple of days with caution amid signs of division within the euro zone over the methods needed to help Greecethrough its funding crisis. This follows a report in the Financial Times that seven of the euro zone's 17 countries want the private sector to incur more of the cost of bailing out Greeceout than was previously agreed. At midday oil pared most of its earlier losses, coming close to its first resistance, supported by a falling dollar and the recovery in equities.

Yesterday, WTI crude futures staged their biggest one-day gain in more than four months and the brent jumped more than 3% Tuesday on hopes that a definitive solution to euro zone debt worries was finally in the works. Oil prices started to rise in electronic morning trading on the bullish technical constellation and a better-than-expected German consumer climate indicator. But the main driving force behind the rally was the hope that European leaders could craft a solution for the euro zone debt crisis. After first resistance lines were breached, technically driven buying orders pushed the oil complex higher and higher and futures at ICE and NYMEX settled higher on the day.

ICE Gasoil contract for October delivery settled at 906.75 dollars on Tuesday. This was 16.25 dollars above Monday's settlement. With some 59,300 contracts the traded volume was about on average.

The Stochastic indicator is still bullish at all charts this morning but Tuesday's price rally has taken much of the bullish potential out of the market. Most investors should have covered their short positions by now. So technical analysts reckon that the downside risk remains and that prices will follow their bearish medium-term trendchannels as soon as the technical upward correction has finished where the strong 85.00 dollar resistance for the WTI crude is seen as the end of the line. The WTI crude is supported at 80.90 dollars today, its first resistance is seen at 84.75 dollars. The Brent's first resistance is seen at 107.00 dollars, its first support is at 104.50 dollars.

U.S.

Nymex Access losing: Oil futures trade lower in East Asiaand Globex electronic trade this morning, holding their breath after Tuesday's sharp gains, weighed down by a stronger dollar as investors sought once again refuge in the greenback and took the chance of a peak in prices to take some profit. The traded volume is well above average.

API's: Crude oil +0.6; distillates -0.2; gasoline +4.6 million barrels vs previous week. Refinery utilization +1.5%

DOE's; due out tonight

Forecasts: Crude oil -0.1; distillates +0.7; gasoline +1.1 million barrels vs previous week.

Houston (ex-wharf indications 26-9)

380cst $615
180cst $659
MGO $908

Very tight avails for 180 cst

New Orleans (ex-wharf indications 26-9)

380cst $617
180cst $661
MGO $911

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

Crude is gaining still, but slowing with WTI +$1.20. Singapore paper is reflecting it with +$4.10 for 180cst and +$4.25 for 380cst for Oct, and for Nov 180 cst +$4.10 and 380cst +$4.25 with MGO Oct contracts at +$1.36 and for Nov at +$1.32. The cargo market is reacting to the bullish sentiment, gaining with 180cst +$15.31, 380cst +$14.79 and MGO +$2.67.

The Singapore fuel oil markets rebounded more than $15.00 during the Platts window erasing earlier loss. The delivered bunker premiums remains around $15.00 above cargo prices yesterday as crude strength continued after the window as sellers were more cautiously selling. Bunker fuel oil swaps gained in a range of $9.50- 10.50 along the curve yesterday. Gains were app. $1.00 higher in Singapore. This morning both markets are trading higher.

High premiums for prompt deliveries.

380 cst $640
180 cst $650
MDO $912

Fujairah (delivered indications 28-9)

380cst $647
180cst $670
MGO $1059

Avails issue are sustaining the market.

ARA (Amsterdam - Rotterdam - Antwerp)

The Demand in the Northwest European market was supported Tuesday on stronger bunker fuel oil values that tracked a $2/barrel rise in ICE Brent for November delivery, sources said. Bullish sentiment on the oil market was supported by some hopes that a Eurozone rescue plan could be found, following talks by G20 leaders and the International Monetary Fund. Rotterdamsaw healthy levels of trading with some buyers keen to secure some volumes on firming fuel oil prices and ongoing high sulfur fuel oil shortages. In the MOC 1% 628-630 were the levels traded, with hs 607-609.50 levels traded.

Rotterdam

Indications for delivered bunkers:

380cst : $ 616
(1.0 %) :$ 636
180cst: $ 642
(1.0 %):$ 663
MGO 0.1%S: $ 915