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Technical indicators: neutral to bullish

Oil futures rose in morning trading after the Euro rallied, and supported by the surprise cut of interest rates by the Bank of Japan. Technically, oil prices got a boost after ICE brent support at 82.90 dollars was hit and proved strong.

As was expected, the US dollar weakened further with the EUR/USD rate rising to nearly 1.38 as further quantitative easing by the Federal Reserve is becoming more likely. President of the New York Fed WIlliam Dudley has already voices his support behind further stimulus, as did his peer from the Chicago Fed Charles Evans.

Oil prices fell from near a two-month high during the session in New York after U.S. stock markets declined for the third time in four days and as the dollar rose against the euro for a second day as investors sought more stable assets instead of commodities.

ICE Gasoil October is expected to open 7.25 to 8.75 dollars lower at about 719.00 dollars/ton after settling at 727.00 dollars (official settlement price) Monday night. This was 7.25 dollars above Friday's settlement. Volume with some 37,100 deals below average.

The short-term uptrend is still strong. Both RSI and Stochastic indicators are still in overbought territory, the Stochastics starts giving a bearish signal. A technical downward correction becomes thus more and more likely. First WTI crude support line at 80.75 dollars today, first resistance line at 82.40 dollars.

U.S.

Nymex Access : Oil futures are flat in Asian trading hours and NYMEX electronic trading this morning, traders looking for direction after Monday's volatile session. No news in the markets. The traded volume is on average.

Survey of US petroleum inventories: crude oil -0.1; distillates -0.6; gasoline -0.3 million barrels vs previous week. Refinery utilization: -0.4%

Houston (ex-wharf indications 4-10)

380cst: $465
180cst: $485
MGO: $743
Very tight avails for 180cst

New Orleans (ex-wharf indications 4-10)

380cst: $467
180cst: $487
MGO: $746

Singapore (correct as of 1430hrs local time)

Crude is bolstering somewhat with WTI +$0.75. Singapore paper is starting to turn with 180cst -$0.40 and 380cst -$0.35 for Oct, and Nov 180 cst +$0.15 and 380cst -$0.30 with MGO Oct contracts +$0.11 and for Nov at +$0.21. The cargo market is slowing now as well with 180cst +$5.21, 380cst +$4.97 and MGO +$0.29.

The Singapore fuel oil prices were up by more than $5.0 as crude softened during Platts window. Market demand continued to be dampened by the higher outright prices while supply was ample. The delivered premiums were ranging $1.0 to $2.0 above cargo prices yesterday.

High premiums for prompt deliveries:

380cst: $468
180cst: $476
MGO: $704

Fujairah (delivered indications 5/10)

380cst: $471
180cst: $492
MGO: $735

Rotterdam

Yesterday (Only barge trade deals of >2 KT reported) 86KT was traded in the MOC between 455.75-457.00 with Litasco as the main seller to Gunvor and Koch as the main buyers.

Relatively weak avails keep the HSFO markets supported. The East bound arbitrage seems to become at workable levels again, also underpinning the local markets. The LSFO markets have seen many cargoes arriving, with more scheduled to arrive out of the US next week. But the steep contango structure is keeping the storages filled.

380cst: $458
(1.0%): $478
180cst: $483
(1.0%): $504
DMB: N/A
MGO 0.1%S: $730