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As expected market participants avoid larger transactions ahead of the weekend. After oil futures have fluctuated significantly in both directions, investors wait for decisive impetus before realising larger transactions. This afternoon, several US economic indicators are scheduled that might bring some new impulsions. However, experts do not expect any larger movements in the course of the day.

Yesterday, volume was very thin in electronic morning trading and oil prices traded in a narrow range as market participants stayed at the sidelines after Tuesday's overdone gains, waiting for the release of the DOE data and the OPEC decision on oil output. When the cartel announced that it was going to stick to the current ceiling of 30 mill b/d, traders liquidated their long positions in what was one of the heftiest sell-offs of the past weeks. Support lines were breached in no time, fuelling even more technical selling. The brent contract fell to a 9-week low and WTI crude lost more than 6% to its opening course. The DOE data being assessed rather bearish, could not stop oil's slide that got additional pressure from a strengthening US-dollar.

OPEC oil producers on Wednesday sealed their first new output agreement in three years in a deal that settles a 6-month-old argument over supply policy. The cartel agreed a target of 30 million barrels daily, ratifying current production near 3-year highs. It did not discuss individual national quotas. In theory the agreement caps output for all 12 OPEC members for the first half of 2012 at levels that should permit a modest rebuilding of lean global inventories. Libyawho currently produces about 1 million b/d is included in the OPEC quota and other members will have to ease back supply as the country heads towards full production. The next scheduled OPEC meeting will be at the 14th of June 2012.

ICE Gasoil contract for January delivery settled at 904.75 dollars on Wednesday. This was 27.75 dollars below Tuesday's settlement. With some 64,700 contracts the traded volume was little above average.

The Stochastic oscillator at the NYMEX and ICE charts is neutral at the oversold level this morning, giving no clear signals. Still, technical analysts reckon that market participants will cover some short positions after Wednesday's hefty losses, triggering a modest upward correction. With Christmas holidays looming, investors are seen consolidating risky positions, so that no significant price jumps are expected.

U.S.

Nymex acces gaining. Oil futures are rising in East Asiaand on Globex electronic trading platform this morning in a technical reaction to yesterday's exaggerated drop, the biggest since September. Investors are covering their short positions ahead of the weekend and are trying to avoid risky positions. The traded volume is little above average. Market participants will observe a string of key US indicators for direction in the afternoon.

API's: Crude oil +0.5; distillates +1.2; gasoline +/- 0.0 million barrels vs previous week. Refinery utilization -1.6%

DOE's; Crude oil -1.9; distillates +0.5; gasoline +3.8 million barrels vs previous week. Refinery utilization -2.6%

Forecasts: Crude oil -2.2; distillates +1.4; gasoline +0.8 million barrels vs previous week

Houston (ex-wharf indications 14-12)

380cst $617
180cst $655
MGO $954

Very tight avails for 180 cst

New Orleans (ex-wharf indications 14-12)

380cst $619
180cst $658
MGO $957

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

Crude is dropping like a stone, losing with WTI -$4.04. Singapore paper is reacting, but is less bearish with -$14.95 for 180cst and -$15.40 for 380cst for Dec, and for Jan 180 cst -$14.80 and 380cst -$15.70 with MGO Dec contracts at -$3.01 and for Jan -$3.01. The cargo market is reflecting the bearish turn, losing with 180cst -$14.80, 380cst -$15.70 and MGO -$3.01.

The Singapore fuel oil markets were up more than +$5.5 during the Platts window yesterday tracking crude. The Singaporefundamentals seem to be improving forward as the cargo premium softened and also more reported cargoes incoming. The delivered bunker premiums were around $19.00 yesterday. Bunker fuel oil swaps were down more than $16/mt at the front and nearly $18/mt at the backend of the forward curve both for Rotterdamand Singaporepapers. East/west spread remains rather broad trading around $40 for January. Viscosity spread between 180cst and 380cst papers broadened notably especially in the front, trading at app. $13/mt for January. Both markets are trading slightly higher this morning.

High premiums for prompt deliveries.

380 cst $652
180 cst $671
MGO $932

ARA (Amsterdam - Rotterdam - Antwerp)

The bunker values in the most liquid ports of Northwest Europefell sharply Wednesday on a massive $3/barrel drop in Brent crude as the euro fell to its lowest level since January. Despite weaker bunker levels, suppliers across NWE reported some buying interest over the day. High and low sulfur fuel oil supplies for prompt in Rotterdamand Antwerpremained very tight with some suppliers fully booked for the week.

Rotterdam

Indications for delivered bunkers:

380cst : $ 601
(1.0 %) :$ 641
180cst: $ 628
(1.0 %):$ 669
MGO 0.1%S: $912