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Crude oil prices surged to a nine-month high on Friday on strong demand from China, relatively low supplies from the Opec oil cartel and geopolitical concerns.

Brent crude hit a session high of $118.41 a barrel, and later traded up 97 cents to $118.20 a barrel. Oil prices had not been as high since early May, when fears about a wave of sanctions on Iranian oil exports drove prices sharply higher. China, the world’s second largest crude oil importer, in January bought 5.92m barrels per day overseas, the highest amount for any month and up 7.4 per cent from a year ago. The buying spree came as refineries boosted production of oil products ahead of the Lunar New Year holiday, when demand increases.

Oil futures at ICE and NYMEX started steady on Thursday, trading sideways in Asain and early European trade. Prices began to rise towards noon. The stochastic’s lines had crossed at the Brent chart, giving off a buying signal which drove prices above their first resistances. Technically triggered buying orders then accelerated upside. Due to thin fundamental news, the technical constellation played a crucial role yesterday. Adding to this was the rising euro. But after the ECB had announced to maintain its current interest rate level, a press conference followed where statements made by Mario Draghi on the state of the euro zone`s economy heavily weighed on the euro, which breached several supports. This also affected oil prices. Brent and G.Oil in London only fell back to their previous low’s while WTI breached all its supports and NYMEX RBOB gasoline also slumped below 300.00 USD. The rather disappointing economic data out of the USA and the recent build in oil inventories also added to NYMEX futures’ downtrend. Both, the API and DoE data, had a bearish effect on American benchmarks, although delayed, while ICE futures were supported by reigniting tensions between Iran and the USA. In the end, WTI crude closed at its day’s low while oil prices at ICE closed with small gains. Today, oil futures were supported in early Asian trading by a far better-than-expected Chinese trade balance excess in January. Figures on the country’s inflation rate met expectations.

ICE Gasoil contract for Febraury delivery settled at 1,014.50 dollars on Thrusday. This was 2.75 dollars above Wednesday's settlement. With some 32,600 deals the traded volume was below average.

After the stochastic oscillator gave off a buying signal at the Brent chart yesterday as its lines had crossed, it is indicating an overbought market situation today and is thus rather bullish. The indicator is still neutral for G.Oil. The stochastic’s lines at the WTI chart are converging again and the indicator is thus neutral. Contrary to ICE futures' technical view, the American benchmark’s indicator has left the overbought level. Thus there is less downward potential for NYMEX futures than for ICE futures. But for a sustainable downward correction to materialize, the RSI would have to fall below the 70%-line. But the indicator is not giving off any signals at the moment. Consequently, we adopt a neutral position today.

U.S.

Nymex neutral to bullish: Oil futures at ICE continue to recover in Asian trading, supported by positive figures on the Chinese trade balance. Trading interest at NYMEX is slightly below average for this time of day. Traders are waiting for the European market to open and especially for the developments at the forex market. Along with the Chinese inflation rate, the American trade balance is also on the agenda today.

Houston (ex-wharf indications 07-02)
380cst $650
180cst $740
MGO $1070

New Orleans (ex-wharf indications 07-02)
380cst $656
180cst $699
MGO $1075

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

WTI is continuing its march upwards with +$0.15. Paper for Feb is tracking crude, gaining with 180cst +$3.05 and for 380cst +$4.40, and Mar contracts with 180cst +$2.10, 380st +$2.10. The cargo market is now adopting the bullishness and yesterday's pace with 180cst +$2.77, 380cst +$3.94 and MGO +$0.55.

High premiums for prompt deliveries.
380 cst $661
180 cst $663
MDO $1000

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 : $ 648
(1.0 %) :$ 683
180cst: $ 678
(1.0 %):$ 713
MGO 0.1%S: $ 1016