---

Oil prices started the day rather muted, hitting first support lines that proved to be strong. A rebounding euro that was boosted by comments of Austrian ECB member Nowotny also supported oil and first resistance lines were hit that limit the gains for the time being. After the past day's losses technical selling pressure has eased and market participants set focus on today's DoE data. After the bearish figures the API reported last night market participants will refrain from going long ahead of the release of the data.

Oil futures edged higher in Tuesday morning trading in a market that profited from a positive Chinese indicator. The Chinese PMI improved to 49.5 in July vs a reading of 48.2 in June. Still, a reading below 50 indicates contraction and therefore markets remained under pressure, investors' focus turning to the euro zone and Germany where more morose indicators were released and Moody's had changed the outlook from stable to negative on Germany, the Netherland and Luxembourg. In the wake of a retreating euro, oil prices breached their first short-term support lines. In the afternoon US indicators couldn’t boost market sentiment either but losses were limited by strong support lines (883.00 dollars G.Oil et 102,40 dollars Brent). FED chief Ben Bernanke in his speech avoided the topic of monetary easing measures, speaking mostly of improving the schooling system instead and could thus give no new stimulus for oil prices that were later on affected by the release of the API data.

ICE Gasoil contract for August delivery settled at 888.25 dollars on Tuesday. This was 6.50 dollars below Monday's settlement. With some 59,300 contracts the traded volume was above average.

The selling signals that the RSI and the Stochastic indicators triggered at the beginning of the week are losing their influence after the recent price collapse. The Stochastic is yet still slightly bearish but left the overbought level. Technical analysts are therefore still bearish this morning but are waiting for some more bearish momentum that would be necessary to open up more downside to prices. This could either come from the fundamental side or when yesterday's lows were breached.

U.S.

Nymex access gaining: Oil futures are zigzagging in Asian trading and on Globex electronic trading platform this morning in a narrow range around last night's settlement. The traded volume is little above average. Market participants eye equities and forex markets today as well as some economic indicators and the release of the DoE data.

API's: Crude oil +1.3; distillates +2.6; gasoline +2.3 million barrels vs previous week. Refinery utilization +1.9%.
DOE's; due out tonight.
Forecasts: Crude oil -0.2; distillates +0.6; gasoline +0.1 million barrels vs previous week.

Houston (ex-wharf indications 24-7)

380cst $608
180cst $638
MGO $950

New Orleans (ex-wharf indications 24-7)

380cst $601
180cst $640
MGO $960

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

Crude is losing again, but only slightly with WTI -$0.17. Singapore paper is reacting with -$0.25 for 180cst and -$0.45 for 380cst for Aug, and for Sep 180 cst -$0.25 and 380cst -$0.45 with MGO contracts Aug -$0.40 and Sep -$0.42. The cargo market is mixed, looking for direction with 180cst -$0.32, 380cst +$1.41 and MGO -$0.09.

The Singapore fuel oil market prices were pretty flattish ranging from -$0.3 to +$1.4 during the morning window yesterday. Market demand remains slow and the incoming cargoes for August are estimated at 4.0 million mt. The delivered bunker premiums were around $7.0 above cargo prices yesterday. This morning markets are trading slightly higher.

High premiums for prompt deliveries.

380 cst $615
180 cst $625
MGO $890

ARA (Amsterdam - Rotterdam - Antwerp)

HSFO and LSFO levels eased on the slipping Euro and Greek/Spanish worries. Continuing loading delays and cutter stock shortages result in high premiums for prompt suppliers however, if any avails at al. High premiums are charged for prompt enquiries.

Rotterdam

Indications for delivered bunkers:
380cst : $ 595
(1.0 %) :$ 642
180cst: $ 621
(1.0 %):$ 685
MGO 0.1%S: $888