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Technical indicators: neutral to bullish

Crude oil futures snapped two days of declines this morning, climbing to a daily high after Chinese consumer prices rose less-than-expected in January and amid ongoing political tensions in the Middle East.

After the expected consolidation in electronic morning trade, WTI crude futures dipped on Monday as the high inventories in the United States continued to weigh on prices even as the tensions in the Middle East supported the Brent and oil product contracts. A stronger dollar also helped provide some pressure on U.S. crude oil prices. The WTI/Brent spread was furthered overnight as an expected renewed upswing in Cushing supplies is pushing the front WTI contango to a new record of over 18.00 dollars, while rising global equities, favorable economic news out of China and underlying Middle East unrest are supporting the brent.

ICE Gasoil contract for March delivery settled at at 871.50 dollars Monday night. This was 21.25 dollars above Friday's settlement. Volume with some 78,900 deals well above average.

Oil futures range well within their long-term uptrend, the WTI crude March contract still being the expection to the rule. Both the Stochastic and RSI indicators are neutral for all contracts, with the expecption of the RSI for the WTI crude that is giving bearish signals. Should the lines of the Stochastic indicators cross, a selling signal would be triggered. Yet technical analysts reckon with rising prices in the morning. The first support for the WTI crude is seen at 84.60 dollars, the first resistance at 86.25 dollars. The brent's first support is at 103.00 dollars, the first resistance at 104.30 dollars.

U.S.

Nymex Acces flat: Oil futures are flat in Asian trading hours and electronic Globex trade this morning, taking their breath after Monday's rally. The traded volume is far below average.

Survey of US petroleum inventories due out today is as follows: crude oil +1.200; distillates -1.200, gasoline +0.800 million barrels vs previous week. Refinery utilization -0.2%

Houston (ex-wharf indications 14/2)

380 cst $560
180 cst $589
MDO $878

Very tight avails for 180 cst

New Orleans (ex wharf indications 14/2)

380 cst $562
180 cst $591
MDO $881

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

Crude is starting to level out with WTI -$0.02 Singapore paper is gaining bullish momentum with +$14.00 for 180 cst and +$13.75 for 380 cst for March, and for Apr 180 cst +$14.05 and 380cst +$13.70 with MGO March contracts at +$2.07 and for Apr at +$2.07 The cargo market is mixed with 180cst +$4.74, 380cst +$7.00 and MGO -$0.71.

The Singapore fuel oil markets continue to stay firm as current tight supplies have been supporting the fuel oil market particularly the 380cst bunker products. The market was up $4.50-7.00/mt yesterday during the Platts window. Both cargo and bunker delivered premiums have increased and are more than $12.50 and $22.00 respectively. Bunker fuel swaps gained more than $16.00/mt lifting the forward curve much higher. Papers in Singapore were slightly stronger compared to Rotterdam. Forward curve remains backwardated in both markets with Calendar 12 Swaps offered at app. $10.00 discount versus spot prices. This morning both markets are trading slightly down.

High premiums for prompt deliveries.

380 cst $625
180 cst $638
MDO $880

Fujairah (delivered indications 15-2)

380cst: $643
180cst: $684
MGO: $965

Rotterdam

Indications for delivered bunkers:

380cst: $564
(1.0%): $579
180cst: $579
(1.0%): $596 (very low avails)
MGO 0.1%S: $875