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Technical indicators: neutral to bullish

Oil prices rose this morning on the back of the dollar weakening and China's announced increased bank reserve requirement ratios to counter inflation risk.

Despite another late rise yesterday in after-hours trading, all contracts finished at about the previous days' settlements and thus confirmed analysts' expectations of a consolidation.

OPEC: On their next meeting tomorrow in Ecuador, no output quota changes are expected. Despite the recent price developments and an anticipated increase in demand for next year.

ICE gasoil December is expected to open 1.50 to 3.00 dollars up at about 760.00 dollars/ton after settling at 757.75 dollars (official settlement price) Thursday night. This was 0.50 dollars above Wednesday's settlement. Volume with some 24.500 deals significantly below average. The contract expires today. The traded volume is very thin as investors focus on the new front month contract for January delivery.

The medium-term uptrend is still solid. The RSI is regarded as neutral while the Stochastic indicator gives bearish signals this morning. The first support for the WTI crude is seen at 88.30 dollars (the lower limit of the uptrend channel), the first resistance at 89.00 dollars. Technical analysts don't expect much volatility for today, but should the first support line be breached, technical selling orders will be triggered.

U.S.

Nymex Access: Oil prices are edging higher in Asian trading hours at NYMEX electronic trading this morning on a weaker dollar and optimism that lower-than-expected US jobless claims would boost oil consumption. No news in the markets. The traded volume is below average.

Houston (ex-wharf indications 9/12)

380 cst $487
180 cst $504
MDO $774

Very tight avails for 180 cst

New Orleans (ex wharf indications 9/12)

380 cst $490
180 cst $507
MDO $777

Singapore (correct as of 1430hrs LT - delivered indications)

Crude is losing slightly with WTI -$0.48. Singapore paper is slowing with Dec +$0.23 for 180 cst and +$1.51 for 380 cst, and for Jan 180 cst +$1.70 and 380cst -$0.01 with MGO Dec contracts at -$0.19 and for Jan at -$0.19. The cargo market is slowing, but still gaining with 180cst +$1.32, 380cst +$2.67 and MGO +$0.64.

The Singapore fuel oil market rebounded slightly by approx. $1.0 only during the Platts window yesterday. Fuel oil cracks softened during the window despite a continued buying by Brightoil. The delivered bunker premiums hovered within $1.5-2.0/mt range above cargo prices. Bunker fuel swaps lost few dollars along the curve again both for Rotterdam 3.5% barges FOB and Singapore 180cst cargo FOB. Losses were again stronger at the front of the forward curve while backend lost a dollar less adding again to the contango of the curve. Both markets are trading higher today.

High premiums for prompt deliveries.

380 cst $501
180 cst $510
MDO $775

Fujairah (delivered indications 10/12)

380cst: $496
180cst: $533
MGO: $788

Rotterdam (delivered indications)

Yesterday (Only barge trade deals of >2 KT reported) In the MOC 54KT was traded between 471.50-472.00 with Petroned as the main seller to Koch as the main buyer.

The NWE HSFO markets are well supplied, with the Russian influx underpinning the markets, outweighing the seven VLCC's reportedly fixed. 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 also still well supplied, with stored product entering the market and product arriving out of the US. The continuing cold weather however is lending some support.

Indications for delivered bunkers:

380cst: $478
(1.5%): $494
180cst: $493
(1.5%): $509 (very low avails)
DMB: N/A
MGO 0.1%S: $772