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Oil prices fell 3 percent this morning as Iraq announced record-high oil production feeding into a heavily oversupplied market, wiping out much of the gains made in one of the biggest-ever daily rallies last week.

The technical constellation turned bullish on Thursday. On Friday it was clearly bullish, bolstering oil futures. In the course of Friday morning, the RSI gave a confirming buying signal at the Gasoil chart, adding to the bullish tone. Overall, investors still consider the market as bearish but last week there were no cues which would have justified further short-positions. Forecasts of a blizzard along the US-East-Coast, bullish aspects regarding the data on US oil inventories and the outlook of the ECB possibly stepping up its expansive measures in March rather triggered some short-covering. This development gained traction on Thursday, continuing on Friday - the more so as the technical indicators provided some buying signals. The technical constellation pointed to further potential up to 32.30 USD WTI. Friday evening the US-crude oil contract reached this marker. Technical buying continued until late in the evening, favoured by the bullish technical constellation. Oil futures thus settled with fresh highs.

ICE Gasoil contract for February delivery settled at 284.00 USD on Friday, this is 25.00 USD above Thursday's settlement. With some 79,100 deals, the traded volume (front month) was above average.

The technical buying signals of the Stochastic indicator and the RSI were generated last week and so they have largely waned by this morning. The RSI is in neutral territory, climbing far less steeply. That is why the technical constellation is far less bullish this morning than it was on Friday. We therefore assess the technical situation as neutral to bullish. WTI reached the 50% Fibonacci-retracement by rising up to 32.30 USD. Against this backdrop, bull pressure might ebb. However, this doesn't exclude further tests of the upside. After last week's sharp upward correction, oil futures might now start consolidating until the 7-period and the 21-period moving average notably converge. The 21-period moving average might be decisive for a continuation of the upward move as it used to limit the slack of the corrections oil futures have seen so far.

U.S.

Nymex above average: Oil futures have just pulled back from the highs they reached in electronic trading this morning. The traded volume at NYMEX is far above average this morning. Investors are now waiting for the European financial and forex markets to open. As to economic indicators, only the German ifo business climate index is due today.

Houston (ex-wharf indications 25-1)
380cst $123
180cst $197
MGO $316

New Orleans (ex-wharf indications 25-1)
380cst $139
180cst $186
MGO $324

Singapore (delivered indications 25-1)

Brent is up with +$0.76 for March contracts. Singapore paper bullish with +$8.00 for 180cst with +$8.25 for 380cst for Jan, and for Feb 180 cst +$8.25 and 380cst with +$8.05 with MGO contracts Jan with +$1.70 and in Feb with +$1.70 .The cargo market is bullish with 180cst +$12.40, 380cst with +$11.43 and MGO with +$3.09.

380cst $162
180cst $166
MGO $266

Fujairah (delivered indications 25-1)

380cst $159
180cst $170
MGO $469

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $138
MGO 0.1%S: $268