---

Oil futures were trading softer this morning as disappointing figures out of China and the slipping euro weighed on prices. However, the oil market could recoup some of its losses towards noon. The HSBC had already released a disappointing manufacturing PMI in China last night that dampened market sentiment early on. With a reading of 50.5 points, the index is just slightly below the limit which separates economic growth from contraction. Selling pressure then even increased in the course of European trading when equally bleak PMI estimates were released in Germany and the euro zone. Concerns over an economic downturn always fuels worries of oil demand growth as well. Adding to this are first surveys that expect U.S. oil inventories to have increased again last week. Another bearish factor has been the declining euro today.

Oil prices at ICE and NYMEX had already been trading up in early Asian trading on Monday, testing their first resistances early on, which still proved to be strong at this point, however. After dropping back to their first support, Brent and WTI again gathered pace and breached several resistances. The surge then stalled at 100.80 USD (Brent) and 88.90 USD (WTI). During morning trade, the softer euro and declining Chinese oil imports weighed on the oil market. Towards noon, however, OPEC members' confident remarks that the price level would recover under its own steam and that an intervention was not necessary lifted market sentiment. Traders then seized last week’s heavy price slump to cover their short positions and engage in long positions. When negative indicators were released in the USA in the afternoon, oil prices slipped again, with crude futures even falling to their day’s lows. As the NYMEX C.Oil contract was expiring yesterday, it displayed an increased volatility. But as the oil market recovered in late trade in wake of rising stock markets and a stronger euro, oil futures in London and New York still closed with gains. Brent settled above 100.00 USD for the first time in one week. This morning, the oil market is tainted with disappointing economic data out of China.

ICE Gasoil contract for May delivery settled at 847.25 USD on Monday. This was 4.25 USD above Friday's settlement. With some 40,000 deals, the traded volume was below average.

The Stochastic at ICE and NYMEX remains bullish today while the RSI is rather neutral, see also technical analysis. Brent has breached the resistance line of its medium-term downtrend channel at 100.50 USD. Even if the contract has slipped below this level again, this breach opened up more upward potential.

U.S.

Nymex easing: After recovering late Monday evening, oil futures are edging lower again this morning after a rather disappointing manufacturing PMI was released in China. The data also made a negative impact on Asian stock markets. Trade volume at NYMEX is far above average for this time of day. Investors are now waiting for the European markets to open, for fresh signals from forex trading as well as for a series of economic data to be released in the USA and the euro zone, particularly eying the figures on the U.S. housing market and estimates of the Americain, German and European PMIs.

Survey of US Petroleum inventories due out tonight at 22:30 (API) and Wednesday at 16:00 (DOE).
Forecast: Crude oil + 1.4; distillates +0.2; gasoline +0.0 million barrels vs previous week.

Houston (ex-wharf indications 22-04 )
380cst $580
180cst $633
MGO $945

New Orleans (ex-wharf indications 22-04)
380cst $588
180cst $638
MGO $946

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

Crude is slowing, but not yet turning with -$0.14. The paper market is bearish , with April 180cst -$2.95 and for 380cst -$3.15, and May contracts with 180cst -$2.95, 380st -$3.15 The cargo market is mixed, with 180cst -$2.85, and 380cst -$3.05 and MGO +$0.09.

The Singapore fuel oil markets fell between -$5.0 to -4.0 during the Platts window yesterday. The delivered bunker premiums were around $10.25 above cargo prices yesterday.

High premiums for prompt deliveries.
380 cst $587
180 cst $593
MGO $840

Fujairah (delivered indications 23-04)

380cst $594
180cst $643
MGO $945

ARA (Amsterdam - Rotterdam - Antwerp)

A lot of congestion in ARA for both ifo and gasoil. Therefor for prompt enquiries, high premiums can be inspected. Many suppliers do expect this situation for still at least a couple of days.

Indications for delivered bunkers:
380cst : $565
(1.0 %) :$ 578
180cst: $ 597
(1.0 %):$ 609
MGO 0.1%S: $ 810