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Oil prices increase at midday in the expected technical upward correction and supported by the rise in European equities. First resistance lines were breached in the process. 80.75 dollar resistance for the WTI and the 103.35 dollar resistance for the Brent were temporarily exceeded but still prove strong.

Yesterday, Oil futures at ICE and NYMEX lost ground Wednesday morning on profit taking after Tuesday's gains. As the technical constellation had lost its bearish bias at this time of the day, oil's losses were limited. Better-than-expected USemployment data and rising equity markets paved the way for an upward correction that was triggered later in the day by bullish US petroleum inventory data. When the two lines of the Stochastic indicator crossed and the RSI breached the 30% line, the technical constellation turned bullish and automatically triggered buying orders supported oil prices also in after-hour trading.

ICE Gasoil contract for October delivery settled at 868.00 dollars on Wednesday. This was 2.75 dollars below Tuesday's settlement. With some 55,900 contracts the traded volume was about on average.

OPEC Even though the cartel's oil production was little changed in September compared to the previous month, it hits a year high after Libyaresumed oil production and exports. OPEC's production level in September was 30,525 mln bpd (incl. Iraq), up 7,000 bpd on month. The cartel's members regard supply and demand in crude markets currently as balanced and oil reserves as sufficient. But demand is slowing due to declining oil imports from Chinaand India, slow economic growth in the US and the European debt crisis. Yet OPEC sees no need for a change in output at their next scheduled meeting. But a Saudi official said the cartel was ready to take the necessary steps to stabilize oil prices if needed.

Both Stochastic and RSI indicators gave a buying signal at all charts yesterday when the two lines of the Stochastic crossed and the RSI breached the 30% line. Even though technical indicators hint at more upside analysts regard the downtrend as strong. Upside should be limited though and medium-term bias is bearish. Better-than-expected USjobless claims would provide some bullish momentum today but only if resistance lines at 80.75 dollars for the WTI and 103.35 dollars for the brent can be breached. The WTI crude is supported at 78.90 dollars today, its first resistance is seen at 79.90 dollars. The Brent's first resistance is seen at 102.85 dollars, its first support is at 102.25 dollars.

U.S.

Nymex Access gaining. Oil futures trade higher in East Asiaand Globex electronic trade this morning, extending Wednesday's gains on technically driven buying orders and supported by the positive opening of European equity markets. The traded volume is below average.

API's: Crude oil -3.1; distillates -2.0; gasoline -5.0 million barrels vs previous week. Refinery utilization -1.0%
DOE's; Crude oil -4.7; distillates -0.7; gasoline -1.1 million barrels vs previous week. Refinery utilization -0.1%
Forecasts: Crude oil +1.0; distillates -0.3; gasoline +1.1 million barrels vs previous week.

Houston (ex-wharf indications 5-10)

380cst $606
180cst $651
MGO $887

Very tight avails for 180 cst

New Orleans (ex-wharf indications 5-10)

380cst $609
180cst $654
MGO $890

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

Crude is gaining bullish momentum with WTI +$2.99 Singapore paper is tracking it with +$8.70 for 180cst and +$7.15 for 380cst for Oct, and for Nov 180 cst +$9.95 and 380cst +$9.10 with MGO Oct contracts at +$0.45 and for Nov at +$0.45. The cargo market is slowly starting to react with 180cst +$0.64, 380cst -$0.10 and MGO +$0.25.

The Singapore fuel oil markets were largely flat during the Platts window yesterday tracking crude. Market was seeing some selling interest yesterday. The delivered bunker premiums remain more than $25.5 above the cargo prices yesterday as supplies were tight and could be exacerbated by Shell’s refinery shutdown disrupting supplies. Bunker fuel swaps managed to post a considerable gain on yesterday’s close. Prices were notably stronger at the backend of the curve gaining approx. $5.0. This resulted in a less pronounced backwardation and might indicate an improvement of the market mood. Markets are trading higher today.

High premiums for prompt deliveries.

380 cst $630
180 cst $640
MDO $880

ARA (Amsterdam - Rotterdam - Antwerp)

Bullish sentiment prevailed across the Northwest European bunker hubs Wednesday on tight high sulfur fuel oil supplies and a $1/barrel day-on-day rise in Brent crude. Stronger oil prices were fueled by news that European Union nations were assembling plans to recapitalize banks and avoid contagion from the eurozone debt crisis. Suppliers reported tight HSFO supplies with replenishment dates still uncertain. In the MOC 1% was traded between $ 606-620 with hs $ 589-598 levels traded.

Rotterdam

Indications for delivered bunkers:

380cst : $ 609
(1.0 %) :$ 627
180cst: $ 628
(1.0 %):$ 653
MGO 0.1%S: $ 882