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Shortly after the release of the DOE's data, oil futures have traded sideways on a high level. US crude stocks have shown less massive draws than forecast by the API. Thus the bearish impact of the data has been dampened. However, at close Brent and ICE G.Oil's strong resistance lines and the renewedly declining euro triggered selling and crude dropped.

After better than expected figures regarding the USA's industrial sector, oil futures at ICE and NYMEX have gained more ground. ICE G.Oil has tested its second resistance at 936.75 dollar. The positive performance of US stocks has provided some additional support. Traders are now looking ahead to the DOE's data on oil inventories.

Total announced today that a well intervention operation has stopped the G4 well leak on the Elgin complex, 240km from Aberdeen in the UK North Sea. The well intervention operation, which involved pumping heavy mud into the leaking well, began on May 15th and the leak was stopped 12 hours later. The G4 well had been leaking following an incident on March 25, which led to 238 people being quickly and safely evacuated from Elgin and an adjacent drilling rig, the Rowan Viking. From an estimated initial gas flow rate of around 2 kg/second, the leak had progressively decreased to an estimated 0.5 kg/s. Since the beginning of the incident, experts from Total and specialist contractors have been working to stop the leak. During the coming days, these teams will closely monitor the G4 well in order to confirm the complete success of the intervention.

Having dropped to a 4-month low in the morning, the euro found some support at 1.2685 dollar. Gains were capped by a strong resistance at 1.2740 dollar. In the afternoon a reasonable French debt sale renewedly provided some support. Worries about a possible exit of Greece from the euro zone still weighed on the common currency, however, even though the president of the ECB, Mario Draghi, announced that the central bank would prefer the country to remain in the currency block. The euro last sold at 1.2735 dollar.

The European Central Bank would like Greece to remain in the euro zone while the decision for the country's possible exit from the currency union is not an issue that the ECB would need to decide on, ECB President Mario Draghi said Wednesday. "While the ECB will continue to comply with the mandate of keeping price stability over the medium term in line with treaty provisions and preserving the integrity of our balance sheet, I want to state that our strong preference is that Greece will continue to stay in the euro area," Draghi said at a conference in honor of executive board member Jose Gonzalez-Paramo, whose eight-year term will expire at the end of May. "Since the treaty doesn't foresee anything on exit, this is not a matter for the ECB to decide," Draghi said.

US economic indicators

• Industrial production +1.1% in April, after -0.6% in March. Forecast: +0.6%.
• Capacity utilization at 79.2% in April, after 78.4% in March. Forecast: +79.0%
• Construction of homes and apartments increased +2.6% in April compared to the previous month to a seasonally adjusted annual rate of 717,000. vs. 699,000 in March (revised figure).
• New building permits dropped by -7.0% compared to a month earlier to an annual rate of 715,000. Economists expected 730,000 new permits, after 769,000 in March.

U.S.

Nymex access losing: The DOE's data show less than forecast builds in crude oil stocks and draws in product stocks. Refinery runs increased significantly in the reported week.

Houston (ex-wharf indications 17-5)

380cst $641
180cst $669
MGO $975

New Orleans (ex-wharf indications 17-5)

380cst $643
180cst $672
MGO $979

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

Crude is bouncing slishtly now with WTI heavily oversold +$0.59 Singapore paper thinks there may still be room for further drops with -$1.35 for 180cst and -$1.35 for 380cst for June, and for July 180 cst -$1.35 and 380cst -$1.35 with MGO contracts June -$0.80 and Juy -$0.79. The cargo market is reacting to the drops, with 180cst -$2.71, 380cst -$5.02 and MGO -$0.40.

The Singapore fuel oil markets fell between -$5.0 to -$2.5 during the morning Platts window yesterday. There was a strong buying interest seen in the market, which lifted the cargo premium to above $4.5/mt. The delivered bunker premiums remained around $6.5 above cargo prices. Bunker fuel swaps remained quite strong yesterday though prices had been assessed down at the market close. Prices lost approx. $1.20 - 1.75/mt across the market though they were a little stronger at the back of the curve compared to the front, esp. for the European indices.

High premiums for prompt deliveries.

380 cst $660
180 cst $668
MGO $905

Fujairah (delivered indications 17-5)

380cst $673
180cst $695
MGO $1040

ARA (Amsterdam - Rotterdam - Antwerp)

The NWE bunker fuel prices were relatively strong yesterday. Both cargo and bunker fuel prices lost a few cents only. Prices in the ARA port hub were supported by the cargo outflow to Asia. Demand was reported low as traders are not keen n fixing in anticipation of the further weakness on a continuing turmoil in Europe. LSFO remains quite tight in Rotterdam.

Rotterdam

Closed for Ascension Day.