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Oil rose above $111 a barrel on Monday, rebounding from the previous session's drop, as concern about supply resurfaced amid growing optimism over signs that the world's biggest economies are on their way to a steady recovery. A cut in Saudi Arabian production last month, pipeline sabotage in Yemen and a weather-related drop in Iraqi shipments have reduced output, while fighting in Syria and Iranian naval exercises in the Strait of Hormuz reminded investors of the risk of wider disruption to Middle East supply. Brent Crude gained 61 cents to $111.25 a barrel by 1208 GMT, after settling 1.1 percent lower on Friday. U.S. oil rose 59 cents to $94.15.

The oil market started with a fundamentally as well as technically bearish tendency last week on Friday after being boosted by a better-than-expected Chinese trade balance and the production cut in Saudi-Arabia on Thursday. The positive effect of the trade balance was dampened by the data on Chinese consumer price inflation released Thursday night since the increasing price level limits the scope for the Chinese central bank to take more expansive measures. Furthermore, the bullish interpretation of the product cut in Saudi-Arabia was revised as this measure predominantly is a reaction to weak demand and overproduction. As market participants were reassured of the comfortable supply situation in the course of the day, they were able to seize the 2.5-month high of prices to take profits on Thursday. While the euro was consolidating at a high level, Brent and WTI breached their key supports at 111.30 dollars and 93.50 dollars respectively, increasing technical selling pressure. Oil futures started a considerable downward reaction due to the fundamental situation which had been long overdue. The rising euro vs the retreating dollar could not prevent this correction but only slightly slow it down. In the evening, oil prices at ICE and NYMEX recovered with WTI being stronger than the other futures. This may have been favoured again by the expansion work on the Seaway Pipeline, making the inventories in Cushing, Oklahoma, more accessible for refineries at the Gulf coast.

ICE Gasoil contract for January delivery settled at 939.75 dollars on Friday. This was 19.50 dollars below Thursday's settlement. With some 115,200 deals the traded volume was well above average.

With Brent's breach of its medium-term support, strong selling signlas were triggered Friday afternoon. The stochastic oscillator is still clearly bearish for G.Oil and Brent. The indicator's lines are still converging for WTI and the stochastic is seen rather neutral here at the moment. Although WTI breached one important support on Friday, the upward tendency remains and offers enough opportunities for profit-taking again . The technical view is still slightly bearish at ICE but the upward tendency may prevent more downward correction at the moment.

U.S.

Nymex Access neutral to bullish: The common currency is preventing more downside at the oil market since futures are trading up this morning after Friday's strong downward correction. Trading interest at NYMEX is slightly above average for this time of day. Market participants are waiting for the European market to open, for the development of the euro and a few economic data to be released today.

Houston (ex-wharf indications 11-01)
380cst $627
180cst $698
MGO $1020

New Orleans (ex-wharf indications 11-01)
380cst $645
180cst $702
MGO $1013

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

WTI is stable still with +$0.11. Paper for Jan are bearish, dropping with 180cst -$5.80 and for 380cst -$5.10 , Feb contracts are dropping as well with 180cst -$5.55, 380st -$5.80. The cargo market is reacting to crude and paper with 180cst -$3.23, 380cst -$4.00 and MGO -$0.71.

The Singapore fuel oil market prices fell more than -$3.0 during the morning Platts window last Friday. Despite lower outright prices, demand was said to be slow. The delivered bunker premium slipped to between $3.5- 5.0 above cargo prices. Bunker fuel oil swaps lost nearly $18/mt at the front of the forward curve for 3.5% and app.$16/mt at the back end. Singapore papers were $1.0-2.0/mt stronger along the curve. This morning the markets are trading higher.

High premiums for prompt deliveries.
380 cst $629
180 cst $633
MDO $940

ARA (Amsterdam - Rotterdam - Antwerp)

There were a few suppliers who were unable to supply for prompt deliveries due to busy schedules. The port of Rotterdam was experiencing difficulties with LSFO for prompt deliveries due to operational delays. Due to the tightness of LSFO in Antwerp the premiums are expected to be higher.

Indications for delivered bunkers:
380cst : $ 610
(1.0 %) :$ 641
180cst: $ 640
(1.0 %):$ 671
MGO 0.1%S: $ 950