---

Oil prices edged higher in morning trade breaching first resistances. They were driven by the API's data on Cushing crude oil stocks and the technical buying signal the RSI gave at the Brent chart this morning. Around noon, prices pulled back from their highs however. As expected, crude oil stockpiles in Cushing, Oklahoma, sharply declined last week as the souther section of the Keystone pipeline (started on January 22) pumped about 0.3 million barrels of crude oil a day from the heartland of the USA to the US Gulf coast. This particularly fosters WTI futures at NYMEX but wil also sends ICE futures higher.

Oil futures at ICE were dominated by the slightly bearish technical constellation on Tuesday morning edging lower at first. They seized their potential down to Monday's lows but failed to breach their key-supports sustainably. NYMEX Crude Oil and Heating Oil surged in the afternoon dragging the other contracts along. The rise was caused by expectations of a draw in US distillate stocks and crude oil inventories in Cushing, Oklahoma. Brent and Gasoil stayed below their first resistances, however, erasing their temporary gains in the course of the afternoon. The crisis in emerging countries and the Libyan government's announcement to end the blockades at oil terminals in the east of the country by military force have been considered bearish factors for ICE futures. WTI breached several resistances in the course of the afternoon fostered as well by bets on the spread between Brent and WTI. Since the API last night confirmed the expected draw in Cushing crude oil stocks, WTI was able to extend its gains until late at night settling with new highs. The spread between the two crude oil sorts thus narrowed to about 8.40 dollars by now.

ICE Gasoil contract for February delivery settled at 906.25 USD on Tuesday. This was +3.25 USD above Monday's settlement. With some 39,200 deals, the traded volume of the front month was below average.

Friday's and Monday's bearish cues have been completely spent by now. The lines of the stochastic indicator already converge. If they cross, the indicator might even give a buying signal. The RSI provides a similar picture. This indicator has dropped below 30% at ICE charts and is now testing this trigger line from below. If the RSI renewedly surpasses 30%, this too would be a buying signal. Since there are no such signals for the time being, we assess the technical constellation as neutral. Brent's downward potential is still limited by Monday's low, whereas Gasoil has a key-support at 900.00 dollars. Technical selling pressure is only likely to increase if oil futures fall below these levels. In this case there might be potential down to this year's lows at 105.00 dollars Brent, or 896.50 dollars Gasoil respectively.

U.S.

Nymex neutral: Market players this morning still digested the API's report on US crude oil stocks. However, the API's figures were interpreted as rather neutral giving only a bullish cue for WTI. The traded volume at NYMEX is on average for this time of day. Traders are now monitoring the development at stock markets looking ahead to new cues from forex markets. They will also keep eying the situation in Libya. Moreover, they are waiting for today's economic data.

API: Crude oil +0.4; Distillates -1.5; Gasoline -1.2 million barrels vs previous week.
Forecasts: Crude oil +2.3; Distillates -2.5; Gasoline +1.4 million barrels vs previous week.

Houston (ex-wharf indications 5-2)
380cst $593
180cst $667
MGO $1010

New Orleans (ex-wharf indications 5-2)
380cst $604
180cst $638
MGO $1009

Singapore (delivered indications 5-2)

WTI is cooling slightly, climbing slightly with +$1.13. Singapore paper is on a bullish track with +$0.75 for 180cst and -$2.00 for 380cst for Feb, and for Mar 180 cst x$0.00 and 380cst -$1.25 with MGO contracts also bearish Feb +$0.50 and Mar +$0.38. The cargo market is bearish with 180 cst -$5.80, 380cst -$3.67 and MGO -$0.23.

380cst $624
180cst $634
MGO $915

Fujairah (delivered indications 5-2)

380cst $615
180cst $643
MGO $982

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $573
(1.0 %) : $613
180cst: $603
MGO 0.1%S: $ 874