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Technical indicators: neutral immediate term / neutral to bullish medium term

Oil prices were in a narrow lateral range on a high level in the morning, investors waiting for direction. No news in the markets. NYMEX volume thin due to Veteran's Day.

Yesterday, oil prices climbed to the highest in two years last night in New York after DOE data showed U.S. crude inventories fell last week and declines in fuel stockpiles exceeded forecasts and as positive news from the US and China's economy lent additional support. China's industrial production grew 13.1 percent in October from a year earlier, boosting oil use in the world's second-largest consumer by 12 percent to a record 8.92 million barrels per day.

The OPEC in its latest report released today revised up its estimate for global oil demand growth in the current year by 190,000 barrels a day, as it expects world economy to expand at a faster pace than previously expected. The cartel also made a slight upward revision to world oil demand growth in 2011, which is now forecast at 1.2 million barrels a day.

ICE gasoil November is is expected to open 6.00 to 7.00 dollars up at about 759.75 dollars/ton after settling at 753.25 dollars (official settlement price) Wednesday night. This was +6.25 dollars vs Tuesday's settlement. Volume with some 28,900 deals far below average. The contract expires today at 13:00 hours. The traded volume is again expected to be very thin this morning.

Oil prices have established well within their steep uptrend. RSI and Stochastic indicators are both still in overbought territory, providing potential for a short-term downward correction. However, some bearish fundamentals would be needed to initiate the correction. The Stochastic does not give any clear signals today. First WTI crude support line seen at 86.75 dollars today, first resistance at 88.40 dollars.

U.S.

Nymex Access : Oil futures are rising in Asian trading hours and NYMEX electronic trading this morning, extending Wednesday's gains unaffected by the rising dollar. No news in the markets. The traded volume is above average.

APIs: crude oil -7.398; distillates -3.995, gasoline -3.448 million barrels vs previous week. Refinery utilization +3.1%

DOEs: crude oil -3.274; distillates -4.972, gasoline -1.917 million barrels vs previous week. Refinery utilization +0.6%

Forecasts: crude oil +0.8; distillates -2.1; gasoline -1.0 million barrels vs previous week. Refinery utilization: +3.1%

Houston (ex-wharf indications 10-11)

380cst: $484
180cst: $504
MGO: $773

Very tight avails for 180cst

New Orleans (ex-wharf indications 10-11)

380cst: $487
180cst: $507
MGO: $775

Singapore (correct as of 1430hrs local time)

Crude is surging still with WTI +$1.36. Singapore paper reflecting it with 180cst +$7.45 and 380cst +$7.51 for Nov, and Dec 180 cst +$6.55 and 380cst +$6.74 with MGO Nov contracts +$1.58 and for Dec at +$1.32. The cargo market is cautiously tracking crude and paper with 180cst +$5.51, 380cst +$5.47 and MGO +$1.08.

The Singapore bunker differential, the price spread between ex-wharf marine fuel prices and fuel oil cargo values, was stronger at $1.50, up 50 cents, with bunker fuel prices rising $5.00 at $493.00/mt. Crack was up 19 cents at a discount of $7.90 to Dubai crude while the January crack rose by the same amount to $7.89/.mt.

High premiums for prompt deliveries:

380cst: $507
180cst: $518
MGO: $760

Fujairah (delivered indications 11/11)

380cst: $507
180cst: $525
MGO: $755

Rotterdam

Yesterday (Only barge trade deals of >2 KT reported) 48KT was traded between 479.50-481.50 with Petroned as the main seller to Litasco as the main buyer.

Despite the demand from VLCC's, the NWE HSFO markets are back into normal backwardation. The Capricorn Star and Al Jabriyah II were fixed for November loading. The HSFO Med market is not attracting any influx as the local market remains slow. The NWE LSFO markets continue to see imports out of the Americas, keeping them long.

380cst: $489
(1.0%): $508
180cst: $512
(1.0%): $532
DMB: N/A
MGO 0.1%S: $770