---

Technical indicators: neutral to bullish

Oil prices are weighed down this morning by a slightly firmer US dollar. Higher crude inventories are pointing to a supply surplus for the last quarter of 2010, not outweighed by OPEC's global demand forecasts yet.

Last Friday , oil futures in London rose and oil products were supported during the session in New York by the dollar's hefty losses and worries over a supply shortage in Europe caused by the closure of some North Sea oil platforms and the dockworkers' strike in France. The high crude stocks at Cushing, Oklahoma, and a declining refinery utilization weighed on the WTI crude, letting the front-month contract fall as low as its first support line and widening the spread between the brent and the WTI to over 8.60 dollars for a barrel.

Contrary earlier comments, OPEC confirms they will increase this year's output by 2 percent as crude levels are seen approaching the 100 usd mark. Not all OPEC members were willing to up the output, but the organization wants to respond to the output increase of the non-OPEC countries.

ICE Gasoil February settled at 814.00 dollars (official settlement price) Friday night. This was 7.75 dollars above Thursday's settlement. Volume with some 56,200 deals on average.

Oil prices stayed within the trading range Friday, NYMEX crude oil in a rather lateral trend while the other contracts are in clear uptrend. The RSI indicator is rahter bearish for all contracts, while the Stochastic indicator for the WTI crude is in oversold territory, paving the way for un upward correction. The Stochastic indicators for ICE contracts and NYMEX products are giving a bullish signal. The first support of the WTI crude is seen at 88.85 dollars today, the first resistance at 90.25 dollars.

U.S.

NYMEX gaining: Oil prices are rising in Asian trading hours and electronic Globex trade this morning, still supported by the fall in the dollar. The WTI crude is recovering from a low of below 89.00 dollars for a barrel. The traded volume is clearly above average.

Houston (ex-wharf indications 21/1)

380 cst $508
180 cst $548
MDO $787

Very tight avails for 180 cst

New Orleans (ex wharf indications 21/1)

380 cst $510
180 cst $551
MDO $790

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

Crude is losing still, but slowing somewhat with WTI -$0.52. Singapore paper is ahead of crude, bouncing up with Feb +$4.50 for 180 cst and +$4.05 for 380 cst, and for Mar 180 cst +$4.55 and 380cst +$4.05 with MGO Feb contracts at +$0.55 and for Mar at +$0.61. The cargo market is losing still with 180cst -$3.89, 380cst -$4.02 and MGO -$0.22.

The Singapore fuel oil markets were down more than $3.5/mt tracking crude during the Platts window. Market has been pretty tight especially for prompt loading due to delayed cargoes. The delivered bunker premiums continued to strengthen ranging $14.0- $16/mt above cargo prices last Friday. Bunker fuel swaps were up by more than $5/mt along the curve both in Rotterdam and Singapore. The backend of the curve still remains weaker and calendar 2012 papers are traded at the premium of $10/mt only against the balance of 2011. Both markets are traded higher this morning.

High premiums for prompt deliveries.

380 cst $550
180 cst $559
MDO $832

Fujairah (delivered indications 24/1)

380cst: $548
180cst: $587
MGO: $885

Rotterdam (delivered indications)

Indications for delivered bunkers:

380cst: $515
(1.0%): $524
180cst: $534
(1.0%): $546 (very low avails)
MGO 0.1%S: $822