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Technical indicators: Neutral to bullish

Oil prices eased in morning trading on technical selling after first resistance lines proved strong and the dollar kept rising against other major currencies. At midday, all contracts had pared some of the earlier losses and seem to rise on Egypt tensions that keep the fear of supply interruptions alive. The firming dollar limits the gains.

Yesterday, Oil prices at ICE and NYMEX declined Thursday morning when support lines were breached and the dollar strenghtened. At midday, a lot of volatility hit the markets when there were ups and downs of hopes that the situation in Egypt was going to be resolved and that President Mubarak would step down. Surprisingly positive US employment data supported the WTI crude in the afternoon while ICE futures lost ground on the stronger dollar. WTI crude rose above its first resistance at 87.80 dollars a barrel as tensions in Egypt intensified after President Mubarak defied the calls for his immediate resignation, agreeing only to delegate powers to his vice president Suleiman. The spread between the Brent and the WTI crude that had temporarily reached an all-time high of 16 dollars, narrowed to about 14.00 dollars.

Officially, OPEC has kept its crude production quotas unchanged as oil has risen from the $70’s most of last year to a two-year high above $92 last week. Higher oil prices have helped fuel inflation and threaten to undermine the global economic recovery.

ICE Gasoil contract for March delivery settled at at 861.75 dollars Thursday night. This was 3.75 dollars above Wednesday's settlement. Volume with some 106,900 deals well above average.

The WTI crude chart still differs from the rest of the oil charts, which are all in clear uptrend. The two lines of the Stochastic indicator crossed Wednesday for all contracts, triggering a buying signal and making the indicator bullish, while the RSI is still seen neutral, yet ready to enter bullish territory. The first support for the WTI crude is seen at 86.70 dollars today, the first resistance at 87.80 dollars. The brent's first support is at 101.40 dollars, the first resistance at 102.25 dollars.

U.S.

Nymex Acces losing: Oil futures are edging a bit lower in Asian trading hours and electronic Globex trade this morning on profit taking after Thursday's late gains and weighed down by the stronger dollar. The brent contract for March delivery dropped below 102.00 dollars for a barrel and the new front month April (the March contract expires today) has also missed the 102 dollar mark. The traded volume is above average.

Houston (ex-wharf indications 10/2)

380 cst $546
180 cst $577
MDO $864

Very tight avails for 180 cst

New Orleans (ex wharf indications 10/2)

380 cst $548
180 cst $580
MDO $878

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

Crude is slowing, losing still with WTI -$0.10 Singapore paper is mixed with +$1.70 for 180 cst and +$1.80 for 380 cst for Feb, and for March 180 cst +$1.80 and 380cst +$2.25 with MGO Feb contracts at -$0.40 and for Mar at -$0.39 The cargo market is in line with paper, gaining with 180cst +$4.07, 380cst +$2.19 and MGO +$1.06

The Singapore fuel oil markets were up again by more than $2.00/mt during the Platts window yesterday. The strong buying interests in the fuel oil swaps continue to firm the Asian fuel oil crack. The short term tight supply is still supporting the market with high cargo and bunker premium. The delivered bunker premiums remained high; assessed at $15.00-21.00 above cargo prices yesterday. Bunker fuel swaps gained more than $4.00 along the curve in Rotterdam and even more in Singapore. Back end of the curve remains slightly weaker for both papers. Both markets are trading higher today.

High premiums for prompt deliveries.

380 cst $600
180 cst $612
MDO $870

Fujairah (delivered indications 11-2)

380cst: $624
180cst: $660
MGO: $940

Rotterdam

Indications for delivered bunkers:

380cst: $548
(1.0%): $564
180cst: $573
(1.0%): $589 (very low avails)
MGO 0.1%S: $862