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In the early morning, oil futures have temporarily traded higher after first supports proved strong and investors' bullish attitude was reinforced by a first survey forecasting draws in USoil inventories. However, when European equities started retreating after a strong opening, oil prices likewise lost ground and fell below their first supports. The ECB's monthly report as well as disappointing Chinese economic data weighed on prices. The Chinese trade balance only shows a slight surplus, stoking concern about oil demand from the world's second most important energy consumer.

Yesterday, Oil prices rose in electronic trading hours Wednesday morning in the wake of the recovering euro when market player's risk sentiment rose after Slovakiasaid it would agree to the expansion of the euro zone bailout fund at the next referendum. Several resistance lines were breached during the day and oil prices hit fresh highs during the session in New York. When the brent's 113.00 dollar resistance proved strong and bearish energy outlooks by the EIA and the IEA weighed, the oil complex retreated from earlier highs. Due to the current tightness of crude oil and products in Europe, losses at the ICE were bigger than in New York, which drove the spread between the WTI and the brent to over 26 dollars for a barrel. Bullish API data limited the losses in after-hour trade, though.

ICE Gasoil contract for October delivery settled at 918.50 dollars on Wednesday. This was 1.50 dollars below Tuesday's settlement. With some 113,700 contracts the traded volume was well above average.

The Stochastic indicator at the WTI and brent charts is giving a selling signal while the one at the gasoil chart is still neutral. The RSI is in the overbought level at all charts. Only if prices succeed in breaching the lower limits of the strong short-term uptrend channel an extensive downward correction will be triggered, so technical analysts. But as market participants will be cautious ahead of the release of the DOE data in the afternoon, a consolidation on the current high level is more likely. The WTI crude is supported at 84.50 dollars today, its first resistance is seen at 86.60 dollars. The Brent's first resistance is seen at 113.00 dollars, its first support is at 111.00 dollars.

U.S.

Nymex Access gaining. Oil futures are steady in East Asiaand Globex electronic trade this morning, lingering around Thursday's settlement levels. The traded volume is about on average.

API's: Crude oil -3.8; distillates -3.1; gasoline -1.2 million barrels vs previous week. Refinery utilization -1.5%
DOE's; due out tonight (one day delayed due to National Holiday on Monday)
Forecasts: Crude oil -0.8; distillates -0.8; gasoline -0.3 million barrels vs previous week.

Houston (ex-wharf indications 12-10)

380cst $645
180cst $690
MGO $938

Very tight avails for 180 cst

New Orleans (ex-wharf indications 12-10)

380cst $648
180cst $692
MGO $941

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

Crude is turning after the bullishness with WTI -$1.49 Singapore paper is slowing but not turning yet with +$3.50 for 180cst and +$3.50 for 380cst for Oct, and for Nov 180 cst +$2.05 and 380cst +$3.45 with MGO Oct contracts at +$0.60 and for Nov at +$0.66. The cargo market is bullish still, gaining with 180cst +$19.64, 380cst +$20.85 and MGO +$1.01.

Singapore fuel oil market prices spiked by more than $19.5/mt during the Platts window yesterday. Market remains tight with lack of on specifications products as cargo premium climbed above $10/mt. The delivered bunker premiums remain firm but slipped to approx. $18.0/mt above the cargo prices yesterday. Bunker fuel swaps gained strongly again yesterday. Front month swaps gained slightly less than $15/mt both for Rotterdam FOB Barges 3.5% and Singapore180-cst Cargo FOB papers. Backend of the curve was strong as well though not as much as the front. Markets are trading lower today.

High premiums for prompt deliveries.

380 cst $675
180 cst $685
MDO $895

Fujairah (delivered indications 13-10)

380cst $665
180cst $678
MGO $1050

Avails issue are sustaining the market.

ARA (Amsterdam - Rotterdam - Antwerp)

Sentiment in the Northwest European bunker market remained mixed Tuesday despite a $1/mt rise in FOBRotterdambarges that tracked firmer front-month Brent crude values. Crude futures moved up about $0.25/b day-on-day Tuesday, following Monday’s strong gains and after European Central Bank president Jean-Claude Trichet called for urgent action on eurozone debts. Suppliers saw variable demand on ongoing product tightness and firmer fuel oil prices. FOBBarges Rotterdam barge values jumped $18/mt on Monday, so there was limited movement on the market. Suppliers in Rotterdamhowever reported good demand due to ongoing high sulfur fuel oil shortages prompted by four VLCCs loading in the port.

Rotterdam

Indications for delivered bunkers:

380cst : $ 639
(1.0 %) :$ 657
180cst: $ 659
(1.0 %):$ 682
MGO 0.1%S: $ 925