---

Brent oil futures rebounded this morning, as investors returned to the market to seek cheap valuations in wake of Monday's 5% plunge.

Oil futures at NYMEX followed fundamentally bearish guidelines due to the increase of Libyan oil production testing their supports already on Monday morning. When futures breached their supports at 49.00 USD WTI, 61.75 USD Brent and 594.25 USD Gasoil technical selling pressure increased also due to the selling signal of WTI's stochastic indicator. Especially futures at ICE considerably eased while WTI's downward potential stayed limited. The prospect of an increase in Iranian and Libyan exports supports especially the European crude oil market. Therefore, market players liquidated their Brent-WTI spread positions which they engaged in last week. This caused some short covering of WTI contracts which was also encouraged by the strong increase in US shares market. Some market players used the Genscape report which indicated an increase in WTI in Cushing, Oklahoma of "only" 1.39 mbpd as supporting factor for WTI. Selling pressure stayed until the evening due to news concerning Iranian nuclear negotiations indicating that an agreement might be achieved this week. Therefore, futures started this week with considerable losses.

ICE Gasoil contract for March delivery settled at 584.50 USD on Monday, this is -9.25 USD below Friday's settlement. With some 36,100 deals the traded volume (front month) was below average.

The stochastic indicator at the Gasoil chart triggered a selling signal which was confirmed by Brent on Monday evening. Gasoil's indicator dropped below the 50 line which underlines the technical constellation. The stochastic indicator at the WTI chart triggered a contrary signal as its lines didn't cross and it even surpassed the 50 line. Therefore, the stochastic indicator at ICE is bearish while the one at the WTI chart is to be interpreted as slightly bullish. WTI was pushed upwards due to short covering which slightly blurred the stochastic indicator. Therefore, we are of the opinion that the technical bearish influences at ICE slightly predominate and consider the technical constellation as neutral to bearish this morning. If the stochastic indicator at the WTI chart changes direction and cross at ICE like yesterday or if it at least drops below the 50 line again technical selling pressure would considerably increase again.

U.S.

Nymex above average: Oil futures at ICE slightly increase after they were put under considerable selling pressure yesterday. The combination of short covering and attacks on Libyan oil fields are supporting factors as well as the breach of the 60.00 USD mark at the Brent chart. The traded volume at NYMEX is about on average at this time of the day. Market participants are waiting for the European financial and the forex markets to open, for news concerning the strikes at US oil refineries, nuclear negotiations and Libyan oil production and for economic indicators that are on the agenda today, as well as for US oil inventory data as per API which is to be released this evening at 10.30 pm.

Houston (ex-wharf indications 3-3)
380cst $339
180cst $455
MGO $675

New Orleans (ex-wharf indications 3-3)
380cst $345
180cst $382
MGO $678

Singapore (delivered indications 3-3)

WTI is losing with -$1.72. Singapore paper is up with -$13.50 for 180cst bearish with -$12.00 for 380cst for Mar, and for Apr 180 cst -$12.25 and 380cst with -$11.00 with MGO contracts Mar bearish with -$2.15 and in Apr with -$2.18. The cargo market is bullish with 180cst +$0.66, 380cst bearish with +$0.22 and MGO bullish with +$1.35.

380cst $352
180cst $376
MGO $579

Fujairah (delivered indications 3-3)

380cst $372
180cst $390
MGO $760

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $311
MGO 0.1%S: $568