---

After a phase of consolidation during electronic trading, oil futures gained considerable ground around noon, bolstered by strong equities and the advancing euro. Several resistance lines have been breached at ICE and NYMEX. As investors expect US oil stocks to have decreased and the Fed to continue with its accommodative monetary policy, market sentiment has been rather positive. How oil futures develop in the afternoon depends on the actual figures regarding US oil inventories, released later today.

Yesterday morning's technical impulsions did not support oil futures sustainably, so quotations tended to trade lower until noon, breaching first short term supports at ICE. Losses were limited, though, as strong equities and the advancing euro supported oil prices. The WTI crude was slightly steadier than the other contracts. In the afternoon it rose above its first resistance lines, despite mixed US economic data. The crack spread (price difference between crude oil and products) as well as the spread between the Brent and the WTI has narrowed correspondingly. The planned reversion of the Seaway Pipeline's pumping direction still makes the prices of the benchmark blends approach. The API's forecast of US oil inventories, which were published at 10.30 p.m. last night, came out bullish, pushing oil futures higher. Still, oil futures settled with slight losses last night, save the WTI crude, which marked some gains.

ICE Gasoil contract for May delivery settled at 996.00 dollars on Tuesday. This was +6.25 dollars above Monday's settlement. With some 34,500 contracts the traded volume was far below average.

The stochastic indicator can no longer be seen as bullish for ICE and NYMEX charts. For the Brent and the G.Oil its lines converge, whereas there will only be a new selling impulsion if they cross. Thus technical analysts still take a neutral stance, closely watching how the indicator will develop in the course of the day. Apart from this, the DOE's data on oil inventories will be released this afternoon. These will also have a strong impact on prices. If the figures come out bearish, the technical constellation would reinforce a downward reaction. Analysts expect the traded volume to rise significantly after 4.30 p.m.

U.S.

Nymex access gaining: Oil futures have hardly changed in Asian trading and on Globex electronic trading platform this morning. Market participants are waiting for the release of the DOE's data on oil inventories this afternoon, after the API's forecast came out surprisingly bullish. The traded volume at NYMEX has been far below average. Market players now eye the performances of stock and forex markets, today's economic indicators.

API's: Crude oil -1.0; distillates -3.6; gasoline -3.6 million barrels vs previous week. Refinery utilization +0.6%
DOE's; due out tonight
Forecasts: Crude oil +1.7; distillates +1.0; gasoline +1.0 million barrels vs previous week Houston (ex-wharf indications 25-4)

380cst $695
180cst $725
MGO $1035

Very tight avails for 180 cst

New Orleans (ex-wharf indications 25-4)

380cst $701
180cst $733
MGO $1045

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

Crude is turning, reflecting Yesterday's bullishness with WTI +$0.87. Singapore paper is gaining still, but slowing with +$2.00 for 180cst and +$1.00 for 380cst for May, and for June 180 cst +$2.00 and 380cst +$1.00 with MGO contracts May +$0.30 and June +$0.29. The cargo market is slowing as well with 180cst +$2.00, 380cst +$1.00 and MGO +$0.29.

The Singapore fuel oil markets were up $4.0-5.0/mt Yesterday morning. The higher outright prices have dampened the demand and the delivered bunker premiums eased to around $6.0 above cargo prices. Bunker fuel oil swaps gained up to $6.5/mt at the front and app. $3.5/mt at the backend of the forward curve for Singapore papers. This morning markets are trading higher.

High premiums for prompt deliveries.

380 cst $714
180 cst $775
MGO $1060

Fujairah (delivered indications 25-4)

380cst $717
180cst $740
MGO $1045

ARA (Amsterdam - Rotterdam - Antwerp)

After last weeks bullishness, the hsfo markets came down firm. The tight lsfo avails improved on incoming cargoes. The Eastern arbitrage seems to open, and more fixtures are expected.

Rotterdam

Indications for delivered bunkers:

380cst : $ 691
(1.0 %) :$ 736
180cst: $ 718
(1.0 %):$ 756
MGO 0.1%S: $992