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Brent crude oil eased under $111 per barrel as the signs of recovery in China were offset by an easing of tensions in the Middle East, where a ceasefire between Israel and Gaza's Hamas rulers took hold on Thursday after eight days of conflict. Brent slipped 32 cents to $110.54 a barrel, although U.S. crude was up 11 cents at $87.49.

Oil futures presented themselves rather volatile on Wednesday, loosing ground in morning trading and recovering short before noon as the expected cease-fire in the Gaza strip was suspended. First resistance lines were breached at ICE and NYMEX. Bearish news such as the drop in Japanese oil imports in October, Shell's announcement to lift the force majeure on its Bonny Light deliveries and some economic indicators played a minor part in view of the importance of the Gaza conflict for the oil complex that consolidated on a high level at this time of the session. After it was clear that a truce had been accomplished between Israel and Palestine oil prices lost ground in London and New York. But profit taking didn't last long as the bullish US oil inventory report and doubts about the durability of the truce lent support. So prices rebounded late in the session and settled higher in the end.

ICE Gasoil contract for December delivery settled at 951,50 dollars on Wednesday. This was 6.75 dollars above Tuesday's settlement. With some 52,900 deals the traded volume was about on average.

Sentiment improved after a report earlier showed that China’s HSBC Flash Purchasing Managers Index, the earliest indicator of the country's industrial activity, rose to 50.4 in November from a final reading of 49.5 in October. It was the first expansion in manufacturing activity since September 2011, easing concerns over the growth outlook for the world’s second largest economy. China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.

The Stochastic oscillator gives a selling signal at the Brent and the WTI chart while the one at the G.Oil chart is still neutral. Should its two lines cross in the course of the session a fresh selling signal would be triggered. Solid short- and medium-term support lines for the Brent and the WTI are seen limiting investors' profit taking, though. Due to the U.S. holiday, trading will be hard to anticipate before the weekend. In a quiet and volatile market the events in the Gaza strip will be in investors' focus and the technical aspects will only play a minor part today.

U.S.

Nymex Access bearish: Oil prices are loosing ground in East-Asia and on Globex electronic trading platform this morning in a quiet and rather volatile market where investors are looking for direction. Due to the U.S. Thanksgiving holiday, the traded volume at the NYMEX is well below average this morning. Market players eye the performance of stock and forex marekts today, some euro zone indicators see economic calendarand news on the truce in the Gaza conflict.

Forecast: Crude oil +0.6; distillates -0.4; gasoline +1.1 million barrels vs previous week.
API's: Crude oil -1.9; distillates -4.4; gasoline -4.8 million barrels vs previous week.
DOE: Crude oil -1.5; distillates -2.7; gasoline -1.5 million barrels vs previous week.

As did the API last night, the DoE reports a surprise draw in US crude oil stocks and higher-than-expected draws in oil product inventories even though refiners ramped up production. Oil product stocks fell drastically last week although demand remained stable vs the previous week and refinery utilization rose. The drop is thus a surprise as rising refinery run rates normally mean rising product stocks. This is why the draws are seen definitely bullish, not so much those of crude oil but of oil products as inventories of gasoline and distillates are below the long-term average while oil production is seen rising in the years to come as producing countries are ramping up production capacities.

Houston (ex-wharf indications 21-11)

380cst $610
180cst $678
MGO $1035

New Orleans (ex-wharf indications 21-11)

380cst $617
180cst $650
MGO $1047

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

Crude is steady with WTI -$0.65. Singapore paper is slightly bullish, going up with +$3.30 for 180cst and +$3.25 for 380cst for Nov, and for Dec 180 cst +$3.30 and 380cst +$3.25 with MGO Nov contracts at +$0.60 and for Dec at +$0.60. The cargo market went down with 180cst -$8.90, 380cst -$9.53 and MGO -$0.45.

The Singapore markets dropped more than $9.0 during the morning Platts window yesterday. The Asian Fuel Oil crack strengthened on stronger buying interest. The delivered bunker premiums were also firmer to around +$4.25 above cargo prices. This morning both markets are trading higher.

High premiums for prompt deliveries.
380 cst $613
180 cst $623
MDO $930

ARA (Amsterdam - Rotterdam - Antwerp)

Operational activity in the main ports remained subdued and continuously reported problems with hsfo and lsfo deliveries due to operational delays at loading installations. In Antwerp and Flushing shortage of HSFO is reported.

Indications for delivered bunkers:

380cst : $ 593
(1.0 %) :$ 627
180cst: $ 623
(1.0 %):$ 657
MGO 0.1%S: $ 945