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Oil prices were bearish this morning, with Brent testing the $120 mark, the lowest level in almost two months, pressured by rising U.S. inventories, the weakening Euro, and concerns about the strength of global demand. Market players now wait for the DOE's data, published this afternoon. If these come out similar to the API's forecast yesterday, selling pressure is likely to increase again and quotations might test there next supports that proved strong for the time being.

After oil futures had already briefly tested their downward potential on Monday, quotations at ICE and NYMEX traded lower on Tuesday morning. Against the backdrop of the unexpected surplus in China's trade balance, the euro that retreated in the morning, the expectations of increasing US oil inventories and renewed fears concerning Spain (after a debt sale with high yields), the ICE G.Oil already tested its first support at 996.00 dollars in the morning. The Brent fell through its support at 121.60 dollars but stopped short of 121.30 dollars. News published by the Iranian broadcaster Press TV, saying that the Iran had halted its oil exports to Spain, only slightly supported oil futures. High US wholesale inventories added to investors' risk aversion and so oil futures breached their next supports in the course of the evening. The EIA's bearish monthly report (US oil demand at 15-year low, OECD reserves reached highest level since 1991) and the IMF's expectations of retreating crude oil prices in 2012 and 2013 kept pressuring prices in the evening. The API's forecast of US oil inventories published at 10.30 p.m. came out bearish. Thus oil futures settled near their intraday lows.

ICE Gasoil contract for April delivery settled at at 993.50 dollars on Tuesday. This was +0.25 dollars above Monday's settlement. With some 43,800 contracts the traded volume was below average.

The stochastic indicator is slightly bearish this morning, whereas the RSI is in neutral territory. After technical supports at ICE had been breached, selling pressure increased yesterday evening. The WTI crude's support proved strong up to now but might be tested once more in the course of the day. Technical indicators are unlikely to bring about new decisive impulsions, as market participants focus on signals from the fundamental side (as the DOE's data in the afternoon, the EIA's report published on Thursday or Chinese economic indicators published on Friday). According to analysts, supports and resistances may only reinforce selling or buying in case they are breached.

U.S.

Nymex acces gaining. Oil futures have edged higher on Globex electronic trading platform this morning. Market participants speak of a counterreaction, after the WTI crude's support proved strong in late trade yesterday. The traded volume is only slightly below average. Investors look ahead to the development at stock and forex markets and the economic indicators today. They will also closely eye the DOE's data, which are to be published this afternoon at 4.30 p.m.

API's: Crude oil +6.6; distillates -0.5; gasoline +1.2 million barrels vs previous week. Refinery utilization -2.2%
DOE's; due out tonight
Forecasts: Crude oil +1.7; distillates -0.6; gasoline -0.6 million barrels vs previous week

Houston (ex-wharf indications 11-4)

380cst $713
180cst $747
MGO $1025

Very tight avails for 180 cst

New Orleans (ex-wharf indications 11-4)

380cst $715
180cst $748
MGO $1052

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

Crude is turning bearish with WTI -$0.82 Singapore paper is gaining bearish momentum, losing with -$10.55 for 180cst and -$10.35 for 380cst for Apr, and for May 180 cst -$9.80 and 380cst -$10.35 with MGO contracts Apr -$2.08 and May -$2.05. The cargo market is slowing, but losing still with 180cst -$2.07, 380cst -$1.69 and MGO -$0.63.

The Singapore fuel oil markets fell only -$1.75 during yesterday morning, tracking crude movement. The delivered bunker premiums were seen around $4.5 above cargo prices. Bunker fuel oil swaps lost up to $4.5/mt in the front and app. $2.5/mt at the backend of the forward curve. This morning markets are trading lower.

High premiums for prompt deliveries.

380 cst $714
180 cst $725
MGO $995

ARA (Amsterdam - Rotterdam - Antwerp)

The ARA markets ease somewhat, but loading congestion remains an issue. Two fixtures have been reported, which will eat into the avails of hsfo. with loading congestion lurking. The Antwerp avails are still very tight. A contango structure is seen for April-May in Rotterdam, suggesting increasing prices.

Rotterdam

Indications for delivered bunkers:

380cst : $ 690
(1.0 %) :$ 756
180cst: $ 718
(1.0 %):$ 757
MGO 0.1%S: $990