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Oil prices dropped on Tuesday after activity in China's factory sector fell to an 11-month low and as Saudi Arabia said its production was close to an all-time high.

Weaker oil futures on Monday morning at ICE and NYMEX. The bearish fundamentals weighed on oil futures yesterday morning. Selling pressure increased in early trading due to the comments of the Saudi oil minister who announced last weekend that Saudi Arabia increased its production to 10 mbpd. The triangle constellation limited technical margins. The supports at 54.00 USD Brent, 516.50 USD Gasoil and 45.25 USD WTI limited further losses. Short covering was triggered at this level while oil futures increased again due to the weak dollar. The dollar lost again some ground versus most other currencies yesterday and in dollar negotiated oil futures became once again less expensive for traders outside the United States. Consequently, oil futures tested their upside breaching several short-term resistances and finally even the key supports of the technical triangle constellation. Therefore, buying orders which market players engaged in to ensure their short risks were automatically triggered. The 56.05 USD Brent mark and the 533.50 USD Gasoil mark stayed strong. The volatility stayed strong in late technical trading. Therefore, oil futures in London and New York eased again in the short term settling finally higher on Monday evening.

ICE Gasoil contract for April delivery settled at 527.75 USD on Monday, this is +2.00 USD above Friday's settlement. With some 41,000 deals the traded volume (front month) was below average.

Oil futures breached important resistances yesterday triggering short term buying signals. The key resistance at 56.05 USD Brent stayed intact yesterday and is to be found at 55.90 USD today. The important resistance at the Gasoil chart which market its downtrend's upper limit also stayed strong and marks at 530.00 USD Gasoil this morning. The RSI at the WTI chart generated a buying signal by surpassing the 30 line but there were no confirming signals at ICE so far. Traders who focus on technical analysis are expected to concentrate especially on supports and resistances which limit margins today and trigger signals if they are breached. Therefore, we consider the technical constellation as neutral this morning.

U.S.

Nymex far above average: Oil futures ease this morning after their technical increase on Monday due to the disappointing Chinese PMI which weighs on oil futures. The traded volume at NYMEX is far above average at this time of the day. Investors are waiting for the European financial and the forex markets to open, for economic indicators which are to be released today, and for the US oil inventory data as per API which is on the agenda this evening.

Houston (ex-wharf indications 24-3)
380cst $298
180cst $464
MGO $583

New Orleans (ex-wharf indications 24-3)
380cst $312
180cst $370
MGO $596

Singapore (delivered indications 24-3)

WTI is gaining with +$1.30. Singapore paper is up with +$8.25 for 180cst with +$8.25 for 380cst for Apr, and for May 180 cst +$8.15 and 380cst with +$7.60 with MGO contracts Apr gaining with +$0.75 and in May with +$0.80. The cargo market is bullish with 180cst +$2.15, 380cst with +$2.54 and MGO bearish with +$0.09.

380cst $303
180cst $321
MGO $520

Fujairah (delivered indications 24-3)

380cst $312
180cst $335
MGO $744

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $288
MGO 0.1%S: $512