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Technical indicators: neutral to bullish

Crude prices are declining slightly after US opening, as traders are taking profits after the recent price rally this morning to $118 a barrel and U.S. oil hit the highest level in 2.5 years, as fighting in Libya disrupted its supplies and renewed concern of wider disruptions in the Middle East. While the Libyan crisis has cut supply from a country that normally provides only 2 per cent of world output, the prospect of unrest spreading to larger producers such as Saudi Arabia is a far more bullish scenario for oil markets.

Last Friday crude in New York increased to a 29- month high on concern unrest in Libya will spread to other North African and Middle East energy exporters, curbing shipments. Oil rose 2.5 percent as Libyan leader Muammar Qaddafi sent troops to recapture towns in the western part of the country and prepared to quash protests in the capital, Tripoli. Prices also advanced on signals U.S. economic growth is accelerating. The nation’s jobless rate fell to 8.9 percent, the lowest level since April 2009, a government report showed.

ICE Gasoil contract for March delivery settled at 966.25 dollars Friday night. This was 6.75 dollars above Friday's settlement. Volume with some 32,700 deals below average.

The Stochastic of WTI remain bullish in the slightly overbought territory. The steep upward trend continues. Analysts are seen a new high for the Brent at 120 US dollars, which could be breached this week. The first support for the WTI crude is seen at 102.75 dollars, the first resistance at 107.00 dollars. The Brent's first resistance is seen at 117.80 dollars, the first support is at 115.70 dollars.

U.S.

Nymex Access gaining: oil prices continuing their rise on heightened worries about supply disruption due to deepening unrest in Libya, while Asian stocks slipped as concerns about the Middle East and higher energy prices weighed on equities. U.S. crude oil futures jumped almost 2 percent, topping 106 dollars, to their highest level in 2.5 years this morning as counteroffensive by Libya's Gaddafi against rebels deepened concerns taht a civil war is brewing in Africa's largest holder of crude oil reserves. The traded volume is well above average.

Houston (ex-wharf indications 4-3)

380 cst $642
180 cst $662
MDO $984

Very tight avails for 180 cst

New Orleans (ex wharf indications 4-3)

380 cst $645
180 cst $665
MDO $987

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

Crude is surging still with WTI +$3.36 Singapore paper is gaining still as well, but less firm with +$2.05 for 180 cst and +$1.35 for 380 cst for March, and for Apr 180 cst +$3.20 and 380cst +$3.15 with MGO March contracts at +$0.70 and for Apr at +$0.70 The cargo market is still looking for direction with 180cst -$1.42, 380cst -$2.16 and MGO +$1.41

The Singapore fuel oil markets dropped last Friday more than $1.5 yesterday during the Platts window tracking crude movement. The Asian fuel oil crack continued to weaken as crude movement outpaced the fuel oil swaps. Market tightness appears to allay as cargo premium continues to soften to $3.0 to $5.5. The bunker delivered premiums were slightly above $12.0 above cargo price last Friday. Bunker fuel swaps gained app. $4.00/mt along the curve both in Rotterdam and Singapore. Both markets remain in backwardation with Singapore Cal12 papers trading at a discount of app. $16.00/mt compared to spot prices. This morning both markets are traded higher.

High premiums for prompt deliveries.

380 cst $645
180 cst $660
MDO $983

Fujairah (delivered indications 7-3)

380cst: $635
180cst: $669
MGO: $994

Rotterdam

Indications for delivered bunkers:

380cst: $605
(1.0%): $652
180cst: $619
(1.0%): $674 (very low avails)
MGO 0.1%S: $982