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Although ICE crude futures had approached their first supports in the early morning, they hold steady in a tight range. The slipping euro hardly made an impact here. However, WTI trades differently. The American crude slumped breaching its first support at 96.40 USD. This was favoured not only by the softer euro but also the rather bearish API report on U.S. oil inventories showed some effect here. After correcting downwards on Monday, oil prices opened by testing first supports in face of bearish technical signals on Tuesday. Brent bounced off its support at 115.00 USD within in its medium-term trend channel. As further selling signals failed to materialize, downward potential was soon used up here, favouring a technical counter-reaction. Along with the positive PMIs in Europe and the rising euro, the market traded up again. Oil prices received an additional boost by the stock markets in the afternoon. At the opening of Wall Street, the U.S. stock indices S&P500 and Dow Jones Industrial Average took an enormous leap. Consequently, the worse-than-expected ISM services PMI did not really carry weight. Moreover, news regarding trouble spots Iran and North Korea continue to support the oil market. The increasingly fierce rhetoric allows for risk premiums, which bolster the price level at ICE and NYEMX. As a result, oil futures closed with considerable gains although Brent bounced off its key resistance at 117.20 USD before rising to its highest level since September 2012.

ICE Gasoil contract for February delivery settled at 1,010.50 USD on Tuesday. This was 6.50 USD above Monday's settlement. With some 40,700 deals the traded volume was below average.

OPEC: Compared to December, OPEC’s oil production slightly declined in January. According to an independent survey, OPEC member only produced 30.33 million barrel/day compared to 30.35 million barrel/day in December. Saudi-Arabia is said to have produced 9.05 million barrel/day, which is 25,000 barrel/day more than in December. The survey further states that Iran’s oil production rose by 75,000 barrel/day in January. Lybia recorded the highest cut, with production falling by 148,000 barrel/day to 1.34 million barrel/day.

The stochastic oscillator is still bearish for Brent and WTI this morning but fresh signals are lacking. The RSI at the ICE charts stays above the 70%-line, indicating an overbought market situation. However, ICE futures’ steep trend channels proved to be strong yet again and prevented a downward correction in yesterday’s session. As long as this uptrend remains intact, oil prices will not decisively correct downwards. Thus we consider the technical analysis to be rather neutral this morning despite the bearish tendency of the stochastic at the Brent and WTI chart.

U.S.

Nymex bearish: After Brent had bounced off its resistance at 117.20 USD, oil prices slightly retreated from their day’s highs in late trading yesterday. But given the lack of fresh signals, the market is rather rangebound in the early morning. Traders are waiting for the European market to open, for signals from forex trading as well as for the DoE data on oil inventories to be released in the afternoon. There are only a few economic data on the agenda today.

Houston (ex-wharf indications 05-02)
380cst $649
180cst $733
MGO $1070

New Orleans (ex-wharf indications 05-02)
380cst $651
180cst $692
MGO $1072

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

WTI is bouncing up again with +$0.46. Paper for Feb is tracking crude, gaining with 180cst +$4.55 and for 380cst +$4.55, and Mar contracts with 180cst +$3.85, 380st +$4.80. The cargo market is losing with 180cst +$1.86, 380cst -$2.45 and MGO -$0.33.

Singapore 380cst delivered product yesterday was trading around 648.00/mt and healthy demand was seen from many players here before Chinese New Year. Asia fuel oil intermonth spreads rebounded, with sentiment boosted by buying interest during the trading window. Singapore Jan imports had increased 14% to around 6.5 million and imports this month may likely drop around 40%. Downside for fuel oil could be capped by upcoming refinery maintenance season in March and April. This morning markets are trading slightly lower.

High premiums for prompt deliveries.
380 cst $654
180 cst $657
MDO $992

ARA (Amsterdam - Rotterdam - Antwerp)

Product supplies improved in both Rotterdam and Antwerp with most bunker suppliers able to offer for prompt delivery without problems. However, a few suppliers continued to report difficulties with product availabilities due to loading delays at some Rotterdam terminals.

Indications for delivered bunkers:
380cst : $ 638
(1.0 %) :$ 675
180cst: $ 668
(1.0 %):$ 704
MGO 0.1%S: $ 1005