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The price of crude oil was steady above $85 Wednesday morning as traders were cautiously optimistic that President Barack Obama will resolve the impending "fiscal cliff" that could derail the fragile recovery in the world's largest economy. Light Sweet Crude Oil (WTI) futures for December delivery, edged up $0.21 to $85.59 a barrel. Yesterday, oil extended losses mostly on demand concerns after the International Energy Agency slashed its global demand forecast for the commodity. Investor also weighed the U.S. fiscal cliff looming ahead with spending cuts and tax hikes indicated in January if a deal is not reached.

Even though the stochastic indicator gave a buying signal yesterday, we rather disregarded this factor assessing the technical situation as neutral. This has already proved right in the course of the morning as the stochastic was unable to significantly bolster oil prices. The latter tended to test their downward potential against the backdrop of slightly bearish market fundamentals. In its monthly energy report, published Tuesday morning, the IEA revised down its demand growth forecast for the fourth quarter and for 2012 as a whole naming the euro zone's debt crisis but also hurricane Sandy as reasons for dents in demand. As far as supply is concerned, the agency expects a rise in production, particularly that of non-OPEC members. After the release of the disappointing ZEW indices on economic sentiment in the euro zone and Germany, oil futures extended their losses, while the euro-dollar parity's fluctuations temporarily slightly bolstered prices. At last, the bearish factors prevailed and oil futures settled with losses.

NEWS: After the fights between the Syrian opposition and governmental troops in the north of the country have lead to tensions between Syria and Turkey Israel has advised the Syrian government to retain in the border areas. This is against the backdrop of a mortar strike into the Israeli-occupied Golan Heights Israel has responded to by firing on Syrian artillery. Israel's military forces were instructed to prevent that Syrian battles spread to Israeli territory, the country's defence minister Ehud Barak said warning of a tougher reaction in case there are more such incidents. Israel had annected the Golan Heights in 1981.

ICE Gasoil contract for December delivery settled at 923.25 dollars on Tuesday. This was 13.50 dollars below Monday's settlement. With some 72,700 deals the traded volume was far above average.

The stochastic indicator does not provide any clear signals this morning and remains neutral. Meanwhile technical triangles have formed that set some short-term limits but also point to a clear reaction if their supports or resistance lines are breached. Thus we still assess the technical constellation as neutral this morning. If quotations leave their triangles, the next supports and resistance lines still indicate that futures will consolidate sideways between 84.05 dollars und 87.50 dollars WTI. Only below or above these marks might oil futures show a new trend.

U.S.

Nymex Access improving: Oil prices have edged higher in East-Asia and on Globex electronic trading platform this morning bolstered by the slightly stronger euro. Futures at ICE and NYMEX marginally recovered from yesterday's lows but have not shown any clear direction yet. The traded volume is far above average. Market players now look ahead to the performance of stock markets, new clues from forex trade and today's economic data, see economic calendar. Moreover they will eye the release of the API's data on US oil inventories at 10.30 p.m.

Survey of US Petroleum inventories due out tonight at 16:30(DOE)
Crude oil +1.6; distillates -0.3; gasoline +0.4 million barrels vs previous week
API: Crude oil +1.5; distillates -0.5; gasoline +0.2 million barrels vs previous week

Houston (ex-wharf indications 13-11)

380cst $606
180cst $706
MGO $1008

New Orleans (ex-wharf indications 13-11)

380cst $611
180cst $706
MGO $1015

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

The Singapore market reopened today after public holiday yesterday. Bunker fuel oil swaps lost app.$4.5/mt along the forward curve both for the Singapore papers. This morning the market is trading slightly higher.

Indications 14/11
High premiums for prompt deliveries.

380 cst $605
180 cst $615
MDO $920

ARA (Amsterdam - Rotterdam - Antwerp)

Although there are still a lot of waiting times at the loadinginstallations for HSFO, the avails for HSFO and LSFO are good.

Indications for delivered bunkers:

380cst : $ 590
(1.0 %) :$ 612
180cst: $ 620
(1.0 %):$ 642
MGO 0.1%S: $ 920