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Brent crude prices fell more than $1 a barrel this morning after the International Energy Agency (IEA) said it saw a gradual easing of oil prices over the next five years due to sluggish economic growth.

Oil prices traded in a narrow lateral range in electronic morning trading on Wednesday, hitting support lines at the ICE that proved strong at this time of the day. Even though the OPEC revised down its oil demand growth once again in its monthly energy outlook, markets were bullish due to geopolitical risks and a supply shortage of North Sea crude. When Tuesday's highs were breached and because of the expiry date of the G.Oil front month today, traders hurried to cover their short positions and a series of technically driven follow-up buying orders was triggered that resulted in investors taking profit towards the end of the session. The selling hit mainly the WTI crude, letting the spread between the two benchmark crude widens to over 23.00 dollars. The strong decline of U.S. distillate inventories as per the API's inventory report lent some support in after-hour trade.

OPEC will also spend heavily on boosting its spare capacity, which is projected to more than double to 5-7 million bpd, a level unseen since before the 2003-2008 oil price rally. OPEC's spare capacity is seen as the main cushion against supply disruptions and worries about dwindling capacity have been one of the main reasons behind recent oil price spikes.

ICE Gasoil contract for October delivery settled at 1.025,50 dollars on Wednesday. This was 23.50 dollars above Tuesday's settlement. With some 47,600 deals the traded volume was little below average. The contract expires today.

The Stochastic oscillator's two lines have converged at the overbought level at the ICE charts so that the indicator does not give a clear signal this morning. The one at the WTI chart is still bullish but as its lines are converging the indicator is loosing its influence. Should the lines at the ICE cross at the overbought level a selling signal would be triggered. But technical analysts are neutral as long as there are no fresh signals in the market.

U.S.

Nymex access bullish: Oil prices are edging higher in East-Asia and on Globex electronic trading platform this morning in a volatile market that is supported by rekindling supply worries. The traded volume is above average. Market players eye the performance of stock and forex markets today as well as the DoE's inventory report tonight and a string of economic indicators .

API : Crude oil +1.6; distillates -6.2; gasoline +2.5 million barrels vs previous week.
DOE; Crude oil +1.7; distillates -3.2; gasoline -0.5 million barrels vs previous week.
Forecasts Crude oil +1.0; distillates -0.4; gasoline -0.1 million barrels vs previous week.

Houston (ex-wharf indications 11-10)

380cst $648
180cst $687
MGO $1085

New Orleans (ex-wharf indications 11-10)

380cst $651
180cst $687
MGO $1085

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

The latest Singapore heavy residual inventory reported a build of +1.7 mbbl to 19.61 mbbl. The delivered bunker premiums were seen around $4.5-5.5 above cargo prices. Bunker fuel oil swaps remained unchanged at the front and added a few dollars at the backend of the forward curve for Singapore papers. This morning the market is trading down. High premiums for prompt deliveries.

380 cst $650
180 cst $660
MGO $970

ARA (Amsterdam - Rotterdam - Antwerp)

The ARA is well supplied in general, but tight HSFO avails and long waiting times at refineries for LSFO, causes some suppliers not to offer for prompt enquiries.