---

Oil prices stayed within their technical trading range this morning. Especially crude futures used the full range between their first resistance and support. After Brent’s first resistance proved to be strong and the euro is slightly slipping, oil prices returned from their first highs. Gains at the stock market, an encouraging German trade balance and the slightly bullish technical constellation made the North Sea crude bounce off its first support. Meanwhile, the euro also is edging higher again.

After a phase of orientation in early trading, oil futures at ICE and NYEMX surged above their first resistance in the first half of the European session as traders liquidated their short positions after the hefty losses last week. Not only the stronger euro but also fundamental news provided some additional bullish momentum. For a start, the Nigerian militant group, MEND, carried out an attack and was threating to launch even more. Moreover, North Korea’s war rhetoric continues to rattle the international community. Adding to this was yet another failure to strike a deal with Iran in negotiations on its controversial nuclear program, this prompted investors to cautiously engage in long positions. Since oil futures were rather overbought, selling signals were triggered when first resistances had been breached, giving further upside to the oil market. Only Brent’s strong resistance at 105.50 USD limited the price surge as investors lost courage and rather took profits. Oil futures at ICE completely ceded their gains and the American crude in New York also slid to its day’s low. ICE Brent’s slump stalled at its second support at 103.60 USD. Only product contracts at NYMEX could more or less hold their gains. It was thanks to the gasoline contract that the other futures recovered in late New York trade and settled higher despite previous losses. Ahead of the summer driving season in the USA, which officially starts on June 1, market players are confident that gasoline demand is going to rise and already eye demand development, Walter Zimmerman, leading analyst at United-ICAP, said. Thus, gasoline futures could further guide the way at the oil market in the days to come.

ICE Gasoil contract for April delivery settled at 880.75 USD on Monday. This was +0.75 USD above Friday's settlement. With some 46,500 deals the traded volume was below average.

The Stochastic still is neutral for ICE futures this morning as its both lines have not crossed yet. After they crossed at the WTI chart, however, a small bullish signal has been triggered. The RSI still is neutral. Given the bullish signal for WTI, we do not consider the technical analysis neutral anymore. As the market also still is oversold, an upward correction is likely before more selling signals can be triggered.

U.S.

Nymex bullish: Oil prices have continued their rise this morning as the euro took a leap in early Asian trading, still supported by the positive figures on German industrial production released yesterday and buoyed by the strong performance of the stock markets, which benefit from China’s lower inflation rate.

Trade volume at NYMEX is above average for this time of day. Investors are now waiting for the European market to open, for fresh signals from forex trading as well as economic data on the agenda today, and the API report to be released tonight.

Survey of US Petroleum inventories due out tonight at 21:30 (API) and Wednesday at 15:30 (DOE)
Crude oil + 1.2; distillates -0.9; gaoline -1.5 million barrels vs previous week

Houston (ex-wharf indications 08-04 )
380cst $603
180cst $656
MGO $1010

New Orleans (ex-wharf indications 08-04)
380cst $604
180cst $642
MGO $1015

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

Crude is gaining momentum, gaining with +$0.29. The paper market is gaining as well, with April 180cst +$1.40 and for 380cst +$1.25, and May contracts with 180cst +$1.65, 380st +$1.50 The cargo market is looking for direction with 180cst -$0.38, and 380cst +$0.60 and MGO -$1.24.

The Singapore fuel oil markets traded flattish during the morning Platts window yesterday. Despite the huge fall in the crude futures, the Singapore fuel oil swaps managed to stay around parity, narrowing the Asian fuel oil crack sharply. The delivered bunker premiums were seen between $8.25 to $9.50 above cargo prices. This morning markets are trading higher.

High premiums for prompt deliveries.
380 cst $615
180 cst $622
MGO $890

Fujairah (delivered indications 09-04)

380cst $623
180cst $672
MGO $1005

ARA (Amsterdam - Rotterdam - Antwerp)

Prompt deliveries were not possible from most of the suppliers last couple of days as barges have been already fully committed for earlier deliveries. Supplies were also interrupted by loading delays at some refineries and/or storages. Especially HSFO seems to be a problem at the moment for prompt enquiries.

Indications for delivered bunkers:
380cst : $598
(1.0 %) :$ 606
180cst: $ 622
(1.0 %):$ 630
MGO 0.1%S: $ 874