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Technical indicators: neutral

Oil prices trade in a narrow lateral range in the morning, between support and resistance lines. No news in the markets. The stronger dollar has no influence on prices.

The EIA's surprise energy report that suggested that US oil consumption rose in 2010 vs the previous year had a bullish impact on oil prices and accounted for the late rally. The technical constellation lent also support, all resistance lines were breached.

ICE gasoil December is expected to open -1.00 to +0.50 dollars at about 734.25 dollars/ton after settling at 734.50 dollars (official settlement price) Monday night. This was 12.50 dollars above Friday's settlement. Volume with some 45,300 deals on average.

When crude prices in New York breached 85.00 dollar resistance Monday after the release of the Department of Energy's surprise report on US oil consumption, the short-term uptrend has strengthened. Yet the Stochastic indicator signals a heavily overbought market, paving the way for a downward correction. The RSI is still in neutral territory. The first support for the WTI crude is seen at 85.00 dollars today, the first resistance at 86.00 dollars.

U.S.

Nymex Access : Oil prices are gaining ground in Asian trading hours and NYMEX electronic trading this morning, WTI crude rising past 84.00 dollars for a barrel, after the European Union approved a rescue for Ireland. No news in the markets. The traded volume is above average.

Survey of US petroleum inventories API data will be released today at 22:30, DOE data Wednesday at 16:30. crude oil -0.6; distillates -0.6; gasoline +0.3 million barrels vs previous week. Refinery utilization: +0.3%

Houston (ex-wharf indications 29-11)

380cst: $489
180cst: $510
MGO: $763

Very tight avails for 180cst

New Orleans (ex-wharf indications 29-11)

380cst: $491
180cst: $512
MGO: $766

Singapore (correct as of 1430hrs local time)

Crude is bulish still with WTI +$0.70. Singapore paper is slowing with 180cst +$3.35 and 380cst +$3.65 for Dec, and Jan 180 cst +$3.55 and 380cst +$3.60 with MGO Dec contracts +$0.71 and for Jan at +$0.69. The cargo market has turned bullish now with 180cst +$5.03, 380cst +$5.25 and MGO +$0.57.

Asian fuel market was up on Monday as well. December/January strengthened further in backwardation, supported by Shell's ongoing bull play on the buying of the fixed-price contracts lifted the product’s cracks to a discount narrower than $7.00 a barrel, despite higher crude benchmarks. The Singapore bunker differential, the price spread between ex-wharf marine fuel prices and fuel oil cargo values, was stronger at a premium of $1.88, up 63 cents, with bunker fuel prices rising $6.00 to $495.00/mt.

High premiums for prompt deliveries:

380cst: $499
180cst: $512
MGO: $735

Fujairah (delivered indications 30/11)

380cst: $495
180cst: $528
MGO: $760

Rotterdam

Yesterday (Only barge trade deals of >2 KT reported) 74KT was traded between 468.50-472.50 with Petroned as the main seller to Totsa as the main buyer.

The NWE HSFO markets continue to firm, as the Eastern Arbitrage is open now. The Front Crown was reported being fixed for for early December loading, now the Kazimah III is also fixed for end December loading, with two more VLCC's reported fixed. The Singaporean markets are seen 60 cents in normal backwardation. The HSFO Med markets are oversupplied and sluggish, with cargoes to NWE starting to become more attractive. For the LSFO there are some cargoes seen moved from NWE to the Med, although the arbitrage is not considered to be open yet. The NWE LSFO markets are well supplied, with stored product entering the market and product arriving out of the US.

380cst: $475
(1.0%): $489
180cst: $490
(1.0%): $506
DMB: N/A
MGO 0.1%S: $740