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Oil prices rose further again Wednesday as analysts predicted a strain on supplies and Middle East tensions would support crude prices. Market players will be cautious ahead of the results of the FED meeting but then little volume boosts volatility. Benchmark crude for October delivery rose 9 cents at midday in Asia to $96.93 per barrel in electronic trading on the New York Mercantile Exchange.

Oil prices rose at ICE and NYMEX in electronic morning trading on Wednesday. In the wake of the rise of the euro oil futures hit their first resistance lines that proved strong at the time but were breached after the Court at Karlsruhe approved the bailout fund, raising investors' spirits. After several more resistance lines were breached in the process, finally the ones at 98,00 dollars (WTI) and 116,65 dollars (Brent) stopped oil's rally. Prices then dropped ahead of the release of the DoE's inventory report, even though bullish figures were expected in the aftermath of hurricane Isaac. But the DoE, as the API the night before, reported unexpected builds in crude oil and distillate stocks and a decline in US gasoline demand. While the gasoline contract at the NYMEX lost considerable ground after the data, rising tensions in Libya and Iran kept supporting crude. Today market participants will stay cautious and prices are seen consolidating before the FED report.

OPEC: Global oil demand is poised to be depressed for the next 18 months while supply levels from OPEC countries are at fairly comfortable levels, the West's energy agency the IEA said. The IEA said it made no significant changes to its global oil demand outlook and forecast demand would grow at a steady rate of around 0.8 million barrels per day (bpd) or 0.9% in both 2012 and 2013. Some analysts said the oil demand outlook would probably be marked down by the IEA in the future.

ICE Gasoil contract for September delivery settled at 996.50 dollars on Tuesday. This was 8.25 dollars above Monday's settlement. With some 36,100 contracts the traded volume was far below average.

The Stochastic oscillator is still in bullish territory at the ICE and NYMEX charts this morning but its two lines are converging so that the indicator is losing its influence. Even though the Stochastic hints at more upward potential, analysts expect oil prices to consolidate today as market participants eye the decision of the FOMC on more monetary stimulus.

U.S.

Nymex access steady: Oil futures are trading at the previous day's level in East-Asia and on Globex electronic trading platform this morning, in a narrow range as was expected. The traded volume is about on average. Market players now eye stock and forex markets as well as today's economic indicators and the widely expected decision of the FED in the afternoon.

Experts expect that the shutdown of Gulf oil installations because of hurricane Isaac still has considerable impact on US oil inventories. Across-the-board draws in crude oil and product stocks seen as not all oil platforms are fully back to operation yet. Refinery run rate should have slightly increased, though.

API's: Crude oil +0.2; distillates +2.5; gasoline -4.2 million barrels vs previous week. Refinery utilization +0.1%
DOE's: Crude oil +0.2; distillates +1.5; gasoline -1.2 million barrels vs previous week. Refinery utilization -1.4%
Forecasts: Crude oil -1.5; distillates -0.9; gasoline -1.6 million barrels vs previous week

Houston (ex-wharf indications 12-9)

380cst $670
180cst $707
MGO $1065

New Orleans (ex-wharf indications 12-9)

380cst $673
180cst $712
MGO $1073

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

Crude is retreating with WTI -$0.65. Singapore paper is bearish with -$1.20 for 180cst and -$1.25 for 380cst for Sep, and for Oct 180 cst -$1.35 and 380cst -$2.55 with MGO contracts Sep -$0.20 and Oct -$0.20. The cargo market is bullish, gaining with 180cst +$3.20, 380cst +$2.26 and MGO +$1.14.

The Singapore fuel oil markets rose higher more than $2.0 during the Platts window yesterday. The Asian Fuel Oil crack was stronger following increasing buying interest. The delivered bunker premiums were seen around $8.0 above cargo prices. Bunker fuel oil swaps gained app.$2.5/mt along the curve for the Singapore paper. This morning the market is trading higher.

High premiums for prompt deliveries.

380 cst $685
180 cst $700
MGO $990

ARA (Amsterdam - Rotterdam - Antwerp)

The ARA is well supplied, with some demand picking up. Shortages of high sulphur material continued to define the Antwerp market Tuesday. Supply had tightened due to maintenance at the Flushing Zeeland refinery. 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 : $ 667
(1.0 %) :$ 730
180cst: $ 688
(1.0 %):$ 754
MGO 0.1%S: $1000