---

Crude dropped in Asia as China February trade data came in weaker than expected with a larger hit than expected from Chinese New Year holidays.

Oil futures at ICE and NYMEX broke above Friday's high on Monday morning, posting fresh 2-month highs. At the Brent chart the rise was initially capped by the resistance near the upper Bollinger Band at 39.50 USD. This limited the upside in the first half of the day. The technical uptrends remained intact. However, the technical indicators didn't provide any fresh cues. Trade only gained some traction when US-markets opened in the afternoon. Brent broke above its key resistance and only little later the psychologically important 40 USD-marker. This triggered further technical short-covering which accelerated the rise. Whilst oil exports from Iraq were expected to have decreased in February, data provider Genscape reported renewed builds in Cushing crude oil stockpiles for the week ending March 4. This capped gains but failed to trigger a downward correction. The bulls eventually prevailed which is why oil futures ended the day with considerable gains. Futures traded on the ICE even reached the highest levels ever seen in 2016 so far.

ICE Gasoil contract for March delivery settled at 355.00 USD on Monday, this was 18.25 USD above Friday's settlement. With some 50,800 deals, the traded volume (front month) was below average.

When oil futures broke above Friday's highs and their important resistances at 39.50 and 40.00 USD, new upward potential was generated, favouring short-covering. Neither the Stochastic indicator nor the RSI are currently giving off any buying signals. The indicators have rather moved more deeply into overbought territory. Oil futures are still trading within the uptrend between the 7-period moving average and the upper Bollinger Band. However, prices have reached the upper end of this trading range. That is why upward potential seems to be largely spent. Selling signals will only be generated if the lines of the Stochastic indicator sustainably cross or the RSI falls back below 70%. But even in this case, the uptrend would remain intact as long as oil futures clearly drop below the 7-period moving average. Currently, there are no fresh cues even though the Stochastic indicator might give off selling signals. That is why we are still assessing the technical constellation as neutral.

U.S.

Nymex above average: After having reached the highest levels in 2016 on Monday, oil futures at ICE and NYMEX edged lower in electronic trading this morning. They are weighed down by the expectations of another rise in US crude oil inventories. The traded volume at NYMEX is above average this morning. Market participants are now waiting for the European financial and forex markets to open as well as for the release of the economic indicators due this Tuesday. Moreover, the API will release its report on US petroleum stockpiles at 10.30 p.m. this evening.

Houston (ex-wharf indications 8-3)
380cst $153
180cst $295
MGO $355

New Orleans (ex-wharf indications 8-3)
380cst $161
180cst $207
MGO $351

Singapore (delivered indications 8-3)

Brent is bullish with +$1.37 for Apr contracts. Singapore paper is up with +$7.30 for 180cst with +$7.25 for 380cst for Mar, and for Apr 180cst +$7.55 and 380cst with +$7.30 with MGO contracts Mar with +$1.76 and in Apr with +$1.74 .The cargo market is up with 180cst +$9.73, 380cst with +$9.79 and MGO with +$2.01.

380cst $174
180cst $178
MGO $338

Fujairah (delivered indications 4-3)

380cst $174
180cst $194
MGO $424

ARA(Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $173
MGO 0.1%S: $373