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Oil futures in London and New York had already traded down early on Tuesday, breaching first short term support levels. Investors took small profits with the euro, particularly favoured by the stock market.

The political deadlock in Italy after parliamentary elections weighed on market sentiment since the euro zone’s the third largest economy faces ingovernability. Economists fear that this could push Italy into an economic crisis. U.S economic data released in the afternoon were mostly better than expected and shortly supported oil prices at ICE and NYMEX. Moreover, the speech of Federal Reserve chairman, Ben Bernanke, also boosted the market since he confirmed that the advantages of an expansive monetary policy still outweighed potential risks and thus, the bond purchasing programme would not be terminated any time soon. Even if nuke talks with Iran had not delivered any clear results in the evening, it seems that negotiations are conducted in a constructive spirit compared to attempts last year.

Together with profit-taking with gasoline futures shortly before switching from winter to summer fuel at NYMEX, this had a bearish effect on prices and thus, Brent’s and WTI’s rise was stopped at their resistances at 114.30 USD and 93.50 USD, respectively. As forecasts expect refinery runs to have increased last week, especially pushed down product futures, which closed with heavy loses yesterday. Brent also incurred some losses while WTI was up. Consequently, the spread between the two benchmarks has narrowed again to about 20 USD.

ICE Gasoil contract for March delivery settled at 956.75 dollars on Tuesday. This was 22.00 dollars below Monday's settlement. With some 78,400 deals the traded volume was far above average.

The Stochastic’s lines have neither crossed at the Brent nor the G.Oil chart in the past day and are now even diverging again, turning the indicator rather bearish for the two while it is still neutral WTI, see also technical analysis. The RSI as well as the Stochastic still indicate an oversold market situation. But as bullish signals are lacking and the stochastic oscillator rather favours a downward movement to yesterday’s lows, we consider the technical constellation slightly bearish this morning. Favoured by technical counter-development as well as the change in structure of the front months helped narrowing the Brent/WTI spread again.

WTI's strong support at 92.60 USD and the rising euro drove up oil prices after the opening of European trade. Moreover, according to Russian media, nuke talks between Iran and the P5+1 group ended with no sign of a breakthrough and a rather tense atmosphere, which also supported the oil market this morning.

U.S.

Brent and G.Oil targeted yesterday’s lows early in the morning while WTI is trading with a strong tendency. Trading interest is clearly about average for this time of day. Traders are waiting for the European market to open, for the final results from nuke talks in Kazakhstan, for the DoE report, for signals from forex trading and for a series of economic data to be released in the USA and the euro zone today.

Survey of US Petroleum inventories due out tonight at 22:30 (API) and Wednesday at 16:30 (DOE)
Crude oil +0.9; distillates -1.7; gasoline -1.4 million barrels vs previous week

Houston (ex-wharf indications 27-02)
380cst $628
180cst $740
MGO $1050

New Orleans (ex-wharf indications 27-02)
380cst $627
180cst $738
MGO $1049

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

Singapore's onshore fuel oil stocks climbed almost 10% this last week. They rose 1.787 million barrels to a three-week high of 20.628 million barrels. Arbitrage volumes from the West were up 67% week-on-week at around 1.04 million metric tonnes. Arrivals from the United States and Venezuela were also high, at 213,000 mt and 297,000 mt respectively. Exports to China totaled 183,000 mt, three times the volume of the previous week, reflecting a revival in demand for straight-run fuel oil from China's independent 'teapot refiners’.

Bunker prices continued falling in all key Asian ports this Tuesday. Singapore's price of benchmark 380cst bunker fuel dropped $2 to average at $640/mt while marine gas oil dropped $5.50 to $972.50/mt. Demand was mostly average for traders, with few reporting "low" demand. Supplies were fine and earliest avails would be from February 27 to March 4, subject to supplier.

High premiums for prompt deliveries.
380 cst $643
180 cst $650
MGO $970

ARA (Amsterdam - Rotterdam - Antwerp)

Trading activity was average at the ports of Rotterdam and Dunkirk, while Antwerp was able to attract more buyers’ interest. Rotterdam remained tight for LSFO for prompt. There is a $10 premium for LSFO prompt deliveries before those dates, a source in Rotterdam said. Market participants were busy at the port of Antwerp fixing stems on the back of dropping crude. However, prompt deliveries could not be offered by some suppliers for LSFO until March 4. HSFO will be available from March 2 onward.

Indications for delivered bunkers:
380cst : $ 616
(1.0 %) :$ 649
180cst: $ 646
(1.0 %):$ 679
MGO 0.1%S: $ 948