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

Oil futures are easing somewhat, WTI crude off from earlier 26-month high on a rebound in the dollar and profit taking after 90.00 dollar resistance proved strong. But futures will continue to be supported by cold weather in the Northern Hemisphere, so analysts predict a further upwards move today.

Crude oil prices rose above $89 a barrel this morning, despite an unexpected rise in US unemployment rate. The jump can also be directly correlated with the bullish trend of the EUR/USD cross.

Oil prices rose during the session in New York last Friday, WTI crude trading near the highest in 26 months, despite a couple of weak US economy data. But the data, showing the U.S. economy added fewer jobs than expected in November, driving the jobless rate to a seven-month peak, weighed on the greenback and boosted crude. A weaker dollar typically lifts oil prices as it lowers the value of greenbacks paid to producers, while making it less expensive for oil consumers using other currencies.

ICE gasoil December is expected to open 8.50 to 10.00 dollars up at about 771.00 dollars/ton after settling at 761.75 dollars (official settlement price) Friday night. This was 11.25 dollars above Thursday's settlement. Volume with some 45,800 deals on average.

Oil prices breached more resistance lines Friday, manifesting the strong uptrend. Both RSI and Stochastic indicator are in overbought territory, a signal for a downward correction. Also, the crude oil chart still shows a double-top formation, so a sudden and hefty price collapse could be triggered today. Should prices keep on rising however, the double top will not materialize. The first support for the WTI crude is seen at 88.00 dollars today, the first resistance at 89.50 dollars.

U.S.

Nymex Access : Oil prices are steady in Asian trading hours and NYMEX electronic trading this morning, with a bullish undertone after Friday's rally, NYMEX crude holding at 25-month highs, as the dollar languished at its lowest level in weeks. No news in the markets. The traded volume is above average.

Houston (ex-wharf indications 3-12)

380cst: $503
180cst: $523
MGO: $778

Very tight avails for 180cst

New Orleans (ex-wharf indications 3-12)

380cst: $505
180cst: $526
MGO: $781

Singapore (correct as of 1430hrs local time)

Crude is gaining bullish momentum WTI +$1.85. Singapore paper is less bullish with 180cst +$4.00 and 380cst +$2.99 for Dec, and Jan 180 cst +$4.51 and 380cst +$4.23 with MGO Dec contracts +$2.37 and for Jan at +$2.36. The cargo market is more cautious than crude with 180cst +$3.58, 380cst +$3.06 and MGO +$1.54.

The Singapore fuel oil markets were up more than $3.0 as on stronger crude closing previously. The heavy residual inventory reported a substantial draw of -2.5 mbbl to 20.39 mbbl. The delivered bunker premiums came off more than $1.5 above cargo prices last Friday. Bunker fuel swaps were up as well both for Rotterdam 3.5% Barges FOB and Singapore 180cst Cargo FOB papers following the general trend. Backend of the curve was a little less up compared to the front. Both markets are trading lower today.

High premiums for prompt deliveries:

380cst: $511
180cst: $522
MGO: $786

Fujairah (delivered indications 6/12)

380cst: $507
180cst: $545
MGO: $773

Rotterdam

Last Friday (Only barge trade deals of >2 KT reported) 62KT was traded between 478.50-481.00 with Litasco and Petroned as the main sellers to Koch and Cargill as the main buyers.

The NWE HSFO markets continue to firm, but the Eastern arbitrage is now considered to be break even only. On the back of many fixtures last week; six VLCC's were reported fixed at the end of the week, the markets have to find out how this influx will be absorbed in Singapore. 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: $485
(1.0%): $499
180cst: $498
(1.0%): $512
DMB: N/A
MGO 0.1%S: $775