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After yesterday's losses oil prices have continued testing their downward potential, breaching first supports. The technical constellation and disappointing European economic indicators have provided some bearish cues.

Tuesday morning oil futures in New York and London have initially kept track of Monday's gains trading between first support and first resistance. Trade was rather subdued as investors were waiting for their US collegues to return. In the course of the day, oil prices tested their downward potential, however. After the opening of NYMEX floor trade first supports have been breached which triggered further technical selling. Even the market participants widely expect the ECB to announce expansive measures on Thursday, some of them are sceptical as Mario Draghi had already announced more monetary easing ahead of the last meeting at the beginning of August but in the end, this was all talk. The euro thus slightly retreated favoring the downward correction at ICE and NYMEX. After China's ISM purchasing manager index, released on Monday, had already fallen short of expectations, the US ISM PMI came out worse than expected as well yesterday. Investors thus worry over the economy of the two largest oil consuming countries. In the course of the afternoon profit taking accordingly increased and so the euro, equities and oil futures have settled with considerable losses. Technical profit taking has continued until late in the evening. The strong supports of the Brent at 114.00 dollars and of the WTI crude at 95.00 dollars have limited the downward potential, however.

ICE Gasoil contract for September delivery settled at 998.00 dollars on Tuesday. This was 3.50 dollars below Monday's settlement. With some 50.600 contracts the traded volume was on average.

The OPEC's oil output rose for the first time in three months in August. Crude-oil production from the group averaged 31.835 million barrels a day in August, up about 390,000 barrels a day from 31.445 million barrels a day in July, according to an independent survey. The largest increase in production of 210,000 barrels a day came from Iraq, which broke above the 3 million barrels a day threshold in August and continued to outstrip Iranian output. Iranian output also experienced a slight bounce in the reported month, despite tight sanctions against the country, including a total European Union embargo on Iranian crude that came into effect on July 1.

The stochastic indicator lines have crossed at the Brent's and the G.Oil's charts this morning, giving a selling signal. The indicator's lines have not yet crossed at the WTI's chart. Several mid and long term supports are still intact at ICE. If these are breached and the stochastic is giving a selling signal, more technical profit taking might be triggered.

U.S.

Nymex access steady: Oil futures have remained nearly unchanged in East-Asia and on Globex electronic trading platform this morning. Futures trade in a narrow range near yesterday's lows. The traded volume is on average. Investors today look ahead to the development at stock and forex markets, as well as some economic data. They are also eying the API's data on US oil inventories.

Survey of US Petroleum inventories due out tonight at 22:30(API) and Wednesday at 16:30(DOE)
Crude oil -5.2; distillates -2.2; gasoline -3.6 million barrels vs previous week

Houston (ex-wharf indications 4-9)

380cst $665
180cst $707
MGO $1062

New Orleans (ex-wharf indications 4-9)

380cst $661
180cst $705
MGO $1062

Singapore (correct as per 14:30hrs LT-delivered indications)

Crude is dropping still with WTI -$2.03. Singapore paper is impressively bearish with -$14.00 for 180cst and -$14.00 for 380cst for Sep, and for Oct 180 cst -$13.25 and 380cst -$13.25 with MGO contracts Sep -$3.00 and Oct -$2.89. The cargo market has held strong continuing in a bearish attitude, gaining with 180cst +$9.00, 380cst +$8.35 and MGO +$1.33.

The Singapore fuel oil markets rose more than $8.0 during the morning Platts window yesterday tracking crude movements. Market remains well supported with a healthy interest on specifications bunker grade cargoes. The delivered bunker premiums were $8.0-9.5 yesterday. Bunker fuel oil swaps were down app.$4/mt along the curve of Singapore papers. This morning markets are trading down.

High premiums for prompt deliveries.

380 cst $675
180 cst $690
MGO $980

Fujairah (delivered indications 5-9)

380cst $705
180cst $725
MGO $1060

ARA (Amsterdam - Rotterdam - Antwerp)

The ARA is well supplied, with some demand picking up. Loading delays are less frequent, but some shortages are reported in Antwerp still. One refinery is due to shut down for maintenance, possibly lasting for a couple of weeks. With short cutter stocks underpinning the markets and a heavy maintenance programme for September with two important North Sea oilfields set for a one month closure. High premiums are charged for prompt enquiries.

Rotterdam

Indications for delivered bunkers:

380cst : $ 655
(1.0 %) :$ 722
180cst: $ 679
(1.0 %):$ 745
MGO 0.1%S: $985