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Technical indicators: neutral to bullish

After easing in morning session, oil prices steadied at midday after news that China surpassed Japan as the second biggest economy in the world lifting Asian and European equities and the strengthening dollar. But the markets still remain anxious that the events in Egypt will spread to other countries in the region. Even though there is relief in the oil market as Mubarak has stepped down there is still a risk for contagion to other countries as Jordan and Syria.

The rising US dollar also weighed on oil prices at Friday midday, but electronic trade was without a clear direction. Only after news of President Mubarak's demission had hit the market, did oil futures collapse in a hefty selloff as market participants got rid of their long positions, expecting a considerable decrease of risk premium.

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 850.25 dollars Friday night. This was 11.50 dollars below Thursday's settlement. Volume with some 86,900 deals well above average.

Oil futures still range well within their long-term uptrend, the WTI crude oil contract still being the expection to the rule. When the contract's medium-term support of 85.10 dollars had proved strong Friday, the chart became rather bullish. Both the Stochastic and RSI indicators are neutral for all contracts, with the expectation of the RSI for the WTI crude which is is still in oversold territory. The first support for the WTI crude is seen at 85.10 dollars, the first resistance at 87.25 dollars. The brent's first support is at 100.50 dollars, the first resistance at 102.55 dollars.

U.S.

Nymex Acces flat: Oil futures are flat in Asian trading hours and electronic Globex trade this morning, investors being cautious after Friday's hefty losses. WTI crude still lingers below 86.00 dollars, support line that was breached Friday. The traded volume is above average.

Houston (ex-wharf indications 11/2)

380 cst $554
180 cst $583
MDO $878

Very tight avails for 180 cst

New Orleans (ex wharf indications 11/2)

380 cst $556
180 cst $586
MDO $882

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

Crude is gaining bearish momentum with WTI -$1.72 Singapore paper is ignoring crude with +$4.25 for 180 cst and +$5.25 for 380 cst for Feb, and for March 180 cst +$1.75 and 380cst +$7.25 with MGO Feb contracts at -$0.81 and for Mar at -$0.83 The cargo market is mirroring paper, gaining with 180cst +$2.83, 380cst +$3.63 and MGO -$0.19.

The Singapore fuel oil markets continued its strong run by more than $3.00/mt during the Platts window last Friday on stronger crude. The cargo premium continued to strengthen to more than $11.00/mt now reflecting the tightness especially in the bunker grade 380cst product. Bunker delivered premiums have also inched higher- now more than $20.00 above cargo prices. Bunker fuel swaps lost a few dollars along the curve both in Rotterdam and Singapore with losses being more pronounced in the backend of the curve for both papers. East/West spread remains wide with March assessed around $43.00/mt. Forward curve remains backwardated in both markets, though quite steep in Singapore papers. April Singapore Swaps are offered at app. $30.00 discount versus spot prices. This morning both markets are trading higher.

High premiums for prompt deliveries.

380 cst $609
180 cst $626
MDO $866

Fujairah (delivered indications 14-2)

380cst: $630
180cst: $669
MGO: $940

Rotterdam

Indications for delivered bunkers:

380cst: $547
(1.0%): $563
180cst: $565
(1.0%): $589 (very low avails)
MGO 0.1%S: $860