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Technical indicators: bearish

Oil futures are seen consolidating with a bearish undertone today as market participants are waiting for more signs on the state of the US economy. Brent prices will remain supported by worries over disruptions in North Sea crude supplies. The spread between the WTI and the brent ist still exceptionally high, tempting oil producers to raise exports to Europe.

Yesterday ,crude oil in New York settled lower after disappointing U.S. corporate earnings and negative housing data, while ICE futures gained some ground on strong demand and lingering worries over disruptions in North Sea crude supplies. The Standard & Poor’s 500 Index retreated the most since November as companies including Goldman Sachs failed to beat profit estimates. The increase in US crude inventories of 3.53 million barrels, the biggest gain in eight weeks, also weighed.

ICE Gasoil February settled at 821.25 dollars (official settlement price) Wednesday night. This was 3.25 dollars above Tuesday's settlement. Volume with some 59,800 deals above average.

The Stochastic indicator is still giving a bearish signal this morning while the RSI on the gasoil chart entered overbought territory. Yet the overall constellation is seen rather neutral today. All contracts are well within their trading range. The first support of the WTI crude is seen at 90.40 dollars today, the first resistance at 92.10 dollars.

U.S.

NYMEX flat: Oil prices are flat in Asian trading hours and electronic Globex trade this morning as market participants wait for direction from more US economy data and DOE oil inventories later today. The WTI crude dropped back below 91.00 dollars for a barrel. The traded volume is on average.

APIs: crude oil -1.400; distillates +0.500 ; gasoline +2.200 million barrels vs previous week. Refinery utilization -0.8%


DOEs: : crude oil +3.533; distillates +0.940 ; gasoline +1.869 million barrels vs previous week. Refinery utilization -1.4%

Forecasts: crude oil -0.4 ; distillates +0.5 ; gasoline +2.2 million barrels vs previous week.

Houston (ex-wharf indications 19/1)

380 cst $516
180 cst $539
MDO $788

Very tight avails for 180 cst

New Orleans (ex wharf indications 19/1)

380 cst $518
180 cst $546
MDO $793

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

Crude is losing more with WTI -$0.39. Singapore paper is starting to react to crude with Feb -$1.55 for 180 cst and -$2.20 for 380 cst, and for Mar 180 cst +$1.55 and 380cst -$2.20 with MGO Feb contracts at -$0.87 and for Mar at -$0.83. The cargo market is ignoring it, gaining still with 180cst +$3.51, 380cst +$3.96 and MGO +$0.53.

The Asian fuel oil market continued its inexorable march upwards; with its prompt time spreads surging to a month-high backwardation 180FO Bal Jan/Feb traded +3.25 in the window. The current spate of tightness should not last much longer because cargo availability is returning but we think some players are still holding out and refusing to sell at lower levels because of the prospect of higher flat price. Ex-wharf premium climbed by more than $1/mt Wednesday to be a brand new 18 month high of 10.36, having started-off this week at $6.33/mt. Bunker fuel swaps closed yesterday with a gain of a couple of dollars at the front of the curve and loosing a bit at the back end. Though there is still some backwardation in front months, generally forward curve stays relatively flat until Q3 2011. This morning both markets are trading down.
v High premiums for prompt deliveries.

380 cst $546
180 cst $554
MDO $830

Fujairah (delivered indications 20/1)

380cst: $546
180cst: $586
MGO: $887

Rotterdam (delivered indications)

Yesterday, (only barge trade deals of >2 KT reported in the MOC): 60KT was traded between 507.50-509.00 with Litasco and Koch as the main sellers to Petroned 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: $514
(1.0%): $524
180cst: $527
(1.0%): $536 (very low avails)
MGO 0.1%S: $825