---

Oil futures, which are near multi-month highs, traded flat Monday, having already priced in a flare up of tension in the oil-rich Middle East. At 1119 GMT, the Nymex light, sweet crude for March delivery was at $95.87 a barrel, down 1 cent. The March Brent contract on London's ICE futures exchange was at $113.01 a barrel, down 27 cents or 0.2%. Violent protests have erupted in Egypt, prompting President Mohammed Morsi to declare a 30-day state of emergency and impose curfews in three cities along the Suez Canal.

Supported by a fundamentally bullish market sentiment, the oil market started with a strong tendency on Friday. After largely positive economic data throughout the week, the German Ifo business climate index released on Friday was also better than expected. Along with the stock market and the euro, oil futures at ICE and NYMEX tended upwards, breaching first resistances. Due to thin fundamental news throughout the day, market participants were largely cautious. Market sentiment was dampened by the disappointing figures on new home sales in the USA released in the afternoon, triggering profit-taking particularly with distillates. U.S. oil inventories released by the DoE on Thursday certainly favoured this reaction. Demand for distillates had declined (on a 4-week average) to the lowest level since July 2009, being 8.2% below last year's average. In addition, first technical selling signals at the stochastic oscillator reinforced the downside, which also affected crude futures. Compared to distillates, however, the bearish effect was rather limited. Thus WTI and Brent closed almost unchanged while ICE G.Oil and NYMEX Heating Oil clearly recorded some losses.

ICE Gasoil contract for February delivery settled at 968.50 dollars on Friday. This was -7.50 dollars below Thursday's settlement. With some 49,700 deals the traded volume was below average.

The stochastic oscillator has given off a selling signal for G.Oil and Brent by now. However, there has not been a signal for WTI so far as the indicator's lines are only converging but have not crosses yet. The technical view as well as the still overbought market situation indicate that oil futures will continue to test downwards. But for a sustainable downward correction, the trend channels still are a decisive factor as they remain intact, thus limiting downward potential. Only if these channels can be breached sustainably will a major technical correction be possible.

U.S.

Nymex slightly bullish: Oil prices trade with a mixed tendency this morning, staying within their range of Friday night. Trading interest at NYMEX is slightly below average for this time of day. Traders are waiting for the European market to open, for fresh signals from forex trading and again, for the stock market, which had rattled off an impressive price rally last week.

Houston (ex-wharf indications 25-01)
380cst $636
180cst $692
MGO $1013

New Orleans (ex-wharf indications 25-01)
380cst $646
180cst $686
MGO $1017

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

The Singapore fuel oil market rose more than $4.5 during the morning Platts window last Friday. The bunker demand was said to be muted in the light of higher outright prices. The delivered bunker premiums were seen app. $4.5 above cargo prices last Friday. This morning the markets are trading slightly higher.

High premiums for prompt deliveries.
380 cst $633
180 cst $651
MDO $1020

ARA (Amsterdam - Rotterdam - Antwerp)

Fuel oil demand picked up by the end of last week, backed by stronger market fundamentals and narrowly range-bound crude oil complex. Barge congestion persisted at the port of Rotterdam but waiting time had reduced to two days from five days over the last week. In Antwerp the LSFO availabilities improved, but suppliers were still unable to quote LSFO for prompt deliveries as a consequence of Rotterdam delays and blending problems at local refineries in Antwerp.

Indications for delivered bunkers:
380cst : $ 619
(1.0 %) :$ 652
180cst: $ 652
(1.0 %):$ 682
MGO 0.1%S: $ 965