---

Technical indicators: neutral to bullish

Oil prices in London and the heating oil in New York rallied Monday after the opening of NYMEX session, supported by the pipeline leak in Alaska that encouraged refiners to buy European or Middle East crudes, helping the brent and distillate prices up. WTI crude stayed within its trading range on speculation the closure of the pipeline will be short-lived and the U.S. has sufficient stockpiles to make up for reduced supply. U.S. West Coast refiners said they are experiencing little or no impact after the closure. Brent’s premium to West Texas oil futures was the widest in almost two years. The technical downtrend is still intact but prices have installed at the upper limit of the trendchannel. Should the important 90.00 dollar WTI crude resistance be breached, technical buying orders will be triggered. As analysts expect the wide spread between the WTI and the brent to narrow, market momentum is rather bullish today. The Stochastic indicator gives a first bullish signal this morning, while the RSI is still neutral. The first support for the WTI crude is seen at 89,00 dollars today, the first resistance at 89,70 dollars.

Crude oil prices will receive some support from Alaskan pipeline closure and the expected production ramp-up by US refiners who had reduced their stocks at the end of last year for fiscal reasons. The wide spread between the brent and the WTI crude is also a bullish factor, as the spread will narrow, supporting the price for the WTI crude.

ICE Gasoil January is expected to open unchanged down at about 782.75 dollars/ton after settling at 782,50 dollars (official settlement price) Monday night. This was 13,50 dollars above Friday's settlement. Volume with some 52.200 deals slightly on average.

U.S.

NYMEX flat: Oil prices are flat in Asian trading hours and electronic Globex trade this morning, paring some of Monday's gains on expectations that US oil inventories have increased and the Trans Alaska pipeline would resume flows within a few days. WTI crude lingers just above 89.00 dollars for a barrel. The traded volume is on average.

Survey of US petroleum inventories data will be released today at 22:30, DOE data Wednesday at 16:30 crude oil +0.2; distillates +0.2; gasoline +1.5 million barrels vs previous week. Refinery utilization: unchanged.

Houston (ex-wharf indications 11/1)

380 cst $510
180 cst $530
MDO $760

Very tight avails for 180 cst

New Orleans (ex wharf indications 11/1)

380 cst $513
180 cst $533
MDO $764

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

Crude is slightly bullish with WTI +$0.50. Singapore paper is bullish too reacting to strong Brent with Jan +$4.55 for 180 cst and +$5.45 for 380 cst, and for Feb 180 cst +$5.35 and 380cst +$4.80 with MGO Jan contracts at +$1.66 and for Feb at +$1.66. The cargo market is yet to follow paper with 180cst +$0.35, 380cst +$0.13 and MGO +$0.02.

The Singapore fuel oil market only inched up slightly on the start of the week as crude was up during the Platts window. The Asian crack spreads continued to be strong on the back of strong buying interest and current tight supplies. The delivered bunker premiums climbed more than $8.0 to $10.0 above cargo prices yesterday.

High premiums for prompt deliveries.

380 cst $533
180 cst $533
MDO $802

Fujairah (delivered indications 11/1)

380cst: $533
180cst: $565
MGO: $855

Rotterdam (delivered indications)

Only barge trade deals of >2 KT reported in the MOC: 54KT was traded between 503-507 with Litasco and Koch as the main sellers with Petroned and again RWE as the main buyers.

The Asian arbitrage and buying interest in the ARA has kept the market bullish with loading delays on barges which were scheduled to load as far back as the 3-7th Jan. Loading delays are affecting as many as 14 barges and are subsequently causing tightness on the prompt HSFO requirements. Two VLCCS are currently loading on arb although the window has now closed for fresh fixtures with the premiums in the ARA as high as $4 despite the softening in VLCC rates. The LSFO is still sluggish, could prompt suppliers to opt for LSFO to meet the prompt HSFO demand. The LSFO markets are in reverse; high stocks and little demand, albeit rising now, dominate the pricing.

Indications for delivered bunkers:

380cst: $511
(1.0%): $518
180cst: $526
(1.0%): $534 (very low avails)
MGO 0.1%S: $798