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Technical indicators: neutral to bullish

Crude oil breached important support line at 87.10 dollars after NYMEX opening. But better-than-expected US data could prevent a further decline. Traders are waiting for DOE data later this afternoon.

Oil prices settled little changed last night in New York after a session that was led by technical momentum rather than fundamentals. As analysts had expected, crude oil stayed within its trading range after failing to breach first support line. Higher-than-expected builds in US gasoline and distillate stocks, signs for a still ailing demand, applied some pressure on prices in after-hour trading last night.

ICE gasoil Januari is expected to open 1.50 to 3.00 dollars up at about 763.00 dollars/ton after settling at 765.25 dollars (official settlement price) Monday night. This was 6.00 dollars above Friday's settlement. Volume with some 67.500 deals above average.

The lateral trading range is still intact. WTI crude is seen between 87.10 and 89.50 dollars (the lower and the upper limit of the trendchannel. The RSI gave a selling signal yesterday when falling through the 70% line while the Stochastic is seen slightly bullish. The first support for the WTI crude is seen at 87.45 dollars, the first resistance at 89.00 dollars.

U.S.

Nymex Access: Oil prices are easing slightly in Asian trading hours and NYMEX electronic trading this morning, pressured by the API report, the strengthening dollar and the FED's comments on the economic recovery. No news in teh markets. The traded volume is above average.

APIs: crude oil - 1.442; distillates +1.951, gasoline +2.415 million barrels vs previous week. Refinery utilization 0.0%

DOEs: due out tonight.

Forecasts: crude oil -2.7; distillates -0.3; gasoline +1.9 million barrels vs previous week. Refinery utilization: +0.9%

Houston (ex-wharf indications 14/12)

380 cst $490
180 cst $506
MDO $774

Very tight avails for 180 cst

New Orleans (ex wharf indications 14/12)

380 cst $493
180 cst $509
MDO $777

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

Crude is dropping like a stone with WTI -$1.34. Singapore paper is losing slightly again as well with Dec -$2.60 for 180 cst and -$2.55 for 380 cst, and for Jan 180 cst -$1.40 and 380cst -$1.35 with MGO Dec contracts at -$0.90 and for Jan at -$0.95. The cargo market is firming with 180cst +$1.14, 380cst +$0.54 and MGO +$0.09.

The Singapore fuel oil market closed with a gain of $0.50-$1.00/mt during the Platts window Yesterday on stronger crude movement. December incoming cargoes are estimated at 3.3 million mt, while January is expected to be around 3.0-3.1 million mt so far. Current supply in Singapore looks healthy and the delivered bunker premiums were in the range of $1.5-2.0 aabove cargo prices Yesterday. This morning both markets are trading lower.

High premiums for prompt deliveries.

380 cst $499
180 cst $509
MGO $768

Fujairah (delivered indications 15/12)

380cst: $506
180cst: $531
MGO: $785

Rotterdam (delivered indications)

Yesterday (Only barge trade deals of >2 KT reported) In the MOC 32KT was traded between 474.50-475.00 with Petroned as the main seller to Gunvor as the main buyer.

The NWE HSFO markets are well supplied, with the Russian influx underpinning the markets. Still the fixed tonnage leaving for the Far East is not tipping the balance. Five VLCC's plus two Alfamax fixtures are reported for December loading. 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%): $490
180cst: $497
(1.5%): $513 (very low avails)
DMB: N/A
MGO 0.1%S: $768