---

Crude oil prices were higher during European morning hours, as the previous session’s steep decline to a two-month low created bargain buying opportunities for investors reluctant to bet that prices would fall further. On the New York Mercantile Exchange, light sweet crude futures for delivery in November traded at USD88.42 a barrel during European morning trade, adding 0.35%.

Oil prices started slightly lower into the day in London and New York and stuck to the bearish tendency in a market that was affected by global demand worries after figures showed that the Chinese services PMI contracted again in September, dropping to its lowest since March 2011. The rather positive indicators from the USA and the euro zone were not strong enough to stop oil's slide as investors had set focus on the supply/demand side. When first support lines were breached in the process, a string of automatic selling orders raised the pressure on oil prices, despite the draw in US crude oil and distillate inventories the DoE showed in its report. The figures, even though bullish, did not succeed to inverse oil's direction and so the futures settled near their day's lows in London and New York.

ICE Gasoil contract for October delivery settled at 958.75 dollars on Wednesday. This was 21.00 dollars below Tuesday's settlement. With some 65,900 contracts the mental newstraded volume was above average.

The Stochastic oscillator stays bearish at ICE and NYMEX charts this morning, signalling more downside to prices. Even though there is no fresh momentum this morning, technical analysts regard the technical market situation as somewhat bearish with a good possibility of an upward correction after yesterday's hefty losses.

U.S.

Nymex access bullish :Oil prices are edging higher on Globex electronic trading platform this morning in the wake of the positive sentiment in Asian markets and supported by the rising euro. The traded volume is above average. Market players eye the performance of stock and forex markets today as well as a string of important economic indicators such as US unemployment figures.

API's: Crude oil +0.5; distillates -0.3; gasoline -0.1 million barrels vs previous week. Refinery utilization -0.1%
DOE's; Crude oil -0.5; distillates -3.7; gasoline +0.1 million barrels vs previous week. Refinery utilization +0.8%
Forecasts: Crude oil +1.7; distillates -0.3; gasoline -0.4 million barrels vs previous week

Houston (ex-wharf indications 3-10)

380cst $642
180cst $683
MGO $1050

New Orleans (ex-wharf indications 3-10)

380cst $653
180cst $683
MGO $1045

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

Crude is dropping with WTI -$2.87. Singapore paper is falling with -$10.95 for 180cst and -$10.55 for 380cst for Oct, and for Nov 180 cst -$10.90 and 380cst -$9.45 with MGO contracts Oct -$1.30 and Nov -$1.40. The cargo market has dropped with 180cst -$9.43, 380cst -$9.88 and MGO -$0.98.

The Singapore Fuel Oil markets fell more than $9.0 during the morning Platts window yesterday. The delivered bunker premiums extended loss to around $5.75 above cargo prices yesterday due to slowing demand and also strong incoming arbitrage data- around 5 million mt this month. Bunker fuel oil swaps lost more than $19/mt at the front of the forward curve Singapore papers. Backend was slightly stronge, down by app.$16/mt. This morning market is trading slightly higher.

High premiums for prompt deliveries.

380 cst $635
180 cst $645
MGO $940

ARA (Amsterdam - Rotterdam - Antwerp)

The ARA is well supplied, with some demand picking up, although Suppliers in Rotterdam continued to experience some difficulties to meet low sulfur fuel oil inquiries for prompt due to ongoing supply shortages in the area. 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 : $ 614
(1.0 %) :$ 664
MGO 0.1%S: $962