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Technical indicators: neutral immediate term / bullish medium term

Oil prices rose in electronic trading, NYMEX crude hit first resistance line at 91.80 dollars on the falling dollar and strong European equity markets. Should crude breach its first resistance, more technical buying orders are expected.

Yesterday, oil futures shed some of the previous day's gains in a thin holiday trading. NYMEX pit trade was closed and oil traded only electronically due to the Martin Luther King Day, which added to some volatility to price moves. Those investors present in the market bet mostly on falling prices after the operators of the Trans Alaska Pipeline System said they had completed repairs and restored oil flows to the USA. Also pressuring the market was an OPEC report that said the market remained well supplied. Yet losses were limited by strong support lines.

ICE Gasoil February is expected to open more or less unchanged at 810.50 dollars after settling at 810.00 dollars (official settlement price) Monday night.

The Stochastic indicator still signals an overbought market and a possible downward correction while the RSI remains in neutral territory. Crude prices are seen ranging within the margin of 90.75 dollars (first support) and 92.40 dollars (first resistance) today, as the traded volume on the NYMEX will be thin today due to the US holiday. Yet the little volume could also bring about a certain price volatility.

U.S.

NYMEX gaining: Oil prices edged higher in Asian trading hours and electronic Globex trade this morning, supported by the easing dollar and a high trading volume after yesterday's holiday. The WTI crude is still holding above 91.00 dollars for a barrel.

Houston (ex-wharf indications 17/1)

380 cst $516
180 cst $539
MDO $795

Very tight avails for 180 cst

New Orleans (ex wharf indications 17/1)

380 cst $518
180 cst $546
MDO $817

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

Crude is slightly bullish with WTI +$0.57. Singapore paper is cooling somewhat with Feb +$0.25 for 180 cst and +$0.60 for 380 cst, and for Mar 180 cst +$0.25 and 380cst +$0.70 with MGO Feb contracts at -$0.29 and for Mar at +$0.29. The cargo market is slowing as well with 180cst +$0.39, 380cst +$0.08 and MGO +$0.60.

The Singapore heavy distillates reported a draw of 1.4 mbbl to 18.5 mbbl. The bunker market demand have been pretty robust and with lower than average incoming cargoes this month, market is tighter and is reflected in the bunker premium. The delivered bunker premiums continued to be around $8.5 above cargo prices. Bunker fuel swaps gained app. $1.00-1.55/mt along the curve for both Rotterdam 3.5% Barges FOB and Singapore 180cst Cargo FOB. Prices at the front of the curve were stronger in Singapore. Both markets are trading down today.

High premiums for prompt deliveries.

380 cst $543
180 cst $552
MDO $827

Fujairah (delivered indications 18/1)

380cst: $543
180cst: $581
MGO: $875

Rotterdam (delivered indications)

Yesterday, (only barge trade deals of >2 KT reported in the MOC): Only 26KT was traded between 505.00-506.00 with Chemoil and Litasco as the main sellers to Totsa as the main buyer.

The Asian arbitrage is open still, but a firm backwardation structure in the Singapore market and healthy inlux of Russian blending product are tempering the bullish sentiment. The Med-Asian arbitrage economics also firmed, with an uptick in reported fixtures. The LSFO is still sluggish, could prompt suppliers to opt for LSFO to meet the prompt HSFO demand. More US cargoes expected next month.

Indications for delivered bunkers:

380cst: $511
(1.0%): $521
180cst: $526
(1.0%): $533 (very low avails)
MGO 0.1%S: $818