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Technical indicators: neutral

Oil prices rose this morning in a technical reaction to Yesterday's losses, the slipping dollar and the cold weather.

ICE gasoil January is expected to open 2.50 to 4.00 dollars up at about 763.75 dollars/ton after settling at 763.75 dollars (official settlement price) Monday night. This was 6.00 dollars above Friday's settlement. Volume with some 55.800 deals above average.

Opec: On their latest meeting last weekend in Ecuador, the organization kept their production output quotas unchanged. This has not changed since January 2009, and is officially 24.84 million b/pd.

After oil prices breached several resistance lines Monday, the short-term downtrend ceased to exist and a rather lateral trend has formed which will set the agenda today. NYMEX crude is seen ranging between 87.10 and 89.50 dollars (the lower and the upper limit of the trendchannel, see chart below). Both, RSI and Stochastic indicator are seen neutral this morning. The crossing of the two lines of the Stochastic would trigger a buying signal, while the RSI would give a selling signal should it drop below the 70% line. The first support for the WTI crude is seen at 87,75 dollars, the first resistance at 89.50 dollars.

U.S.

Nymex Access: Oil prices are flat in Asian trading hours and NYMEX electronic trading this morning, taking their breath after Monday's ups and downs, as investors continue to watch for any new monetary policy announcements by China and ahead of U.S. inventory data. No news in the markets. The traded volume is aboveve average.

Survey of US petroleum inventories: API data will be released today at 22:30, DOE data Wednesday at 16:30.

crude oil -2.7; distillates -0.3; gasoline +1.9 million barrels vs previous week.

Houston (ex-wharf indications 13/12)

380 cst $490
180 cst $506
MDO $774

Very tight avails for 180 cst

New Orleans (ex wharf indications 13/12)

380 cst $493
180 cst $509
MDO $777

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

Crude is losing still with WTI -$0.54. Singapore paper is turning, ahead of crude with Dec +$0.05 for 180 cst and +$1.03 for 380 cst, and for Jan 180 cst +$0.50 and 380cst -$0.23 with MGO Dec contracts at -$0.05 and for Jan at +$0.09. The cargo market is still looking for direction with 180cst +$0.11, 380cst -$0.05 and MGO - $0.25.

The Singapore fuel oil market was pretty flat during the Platts window Yesterday as strong crude movement erased the previous crude drop. The Singapore heavy residual inventory reported a build of +1.6 mbbl to 21.94 mbbl. The delivered bunker premiums were $1.5 to $3.0 range above cargo prices last Friday. Bunker fuel swaps gained $4.50 along the curve both for Rotterdam 3.5% Barges FOB and Singapore 180cst Cargo FOB following the general trend. Backend of the curve was a little less up compared to the front. Both markets are trading up today.

High premiums for prompt deliveries.

380 cst $501
180 cst $510
MDO $775

Fujairah (delivered indications 14/12)

380cst: $496
180cst: $533
MGO: $789

Rotterdam (delivered indications)

Yesterday (Only barge trade deals of >2 KT reported) In the MOC 116KT was traded between 472.00-475.00 with Petroned and Gunvor as the main sellers to RWE, Koch and Cargill as the main buyers.

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: $480
(1.5%): $490
180cst: $494
(1.5%): $506 (very low avails)
DMB: N/A
MGO 0.1%S: $767