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Technical indicators: bullish

Oil prices are climbing back to around 100 US dollars per barrel after a crackdown on protesters in Bahrain increased tensions in a conflict that threatens to pull in OPEC heavyweights Saudi Arabia and Iran. Meanwhile, Japan is expected to boost imports of fossil fuels as the third-largest economy recovers from the Sendai disaster. And the world's largest oil consumer, the U.S., reported Thursday that unemployment claims dropped to the lowest level since July 2008. But the bunch of US economic data did not influence the volatile market much.

Oil prices were very volatile yesterday. During late NYMEX trade, oil prices declined strongly, as Japan continues to weigh on the market. Bahraini forces used tanks and helicopters to drive protesters from the streets on Wednesday clearing a camp that had become a symbol of the Shi'ite Muslim uprising and drawing rare criticism from their U.S. allies. The violence that has transformed a crisis between the island's majority Shi'ites and minority Sunnis into a regional standoff between Sunni Gulf Arab states and non-Arab Shi'ite power Iran. Bahrain lies less than 100 kms from the hub of the Saudi oil industry at Dhahran, including the world's largest oil fields, oil terminal and processing plant. Recent demonstrations by Saudi Shi'ites have also centered in the kingdom's Eastern Province. In Libya, the battle for control of rebel capital Benghazi looked just hours away after the Libyan army told people to leave opposition-held locations and arms storage areas, but residents said the city was quiet.

OPEC members including Saudi Arabia have increased production partly to compensate for the loss of as much as two-thirds of Libyan supplies, at the same time eroding spare capacity.

ICE Gasoil contract for April delivery settled at 959.00 dollars Wednesday night. This was 7.00 dollars above Tuesday's settlement. Volume with some 128,700 deals well above average.

The Stochastic for Brent starts giving a buying signal to the markets today. The Stochastic of WTI is still slightly bearish and restrains NYMEX C.Oil in his upward movement. Nevertheless, the trend canals remain intact. The first support for the WTI crude is seen at 103.90 dollars, the first resistance at 105.50 dollars. The Brent's first resistance is seen at 117.00 dollars, the first support is at 112.15 dollars.

U.S.

Nymex Access gaining. Oil prices prices recovered from a sharp fall below 97 dollars a barrel Thursday to move into positive territory, after Japan's biggest utility said it hopes to restore power to the quake-hit Fukushima Daiichi nuclear plant within hours. Japanese military helicopters dumped loads of seawater onto the Fukushima nuclear complex Thursday in a bid to cool overheated uranium fuel rods that may be close to leaking more radiation. The plant was initially damaged last week by a massive earthquake and tsunami that is estimated to have killed more than 10,000 people and left hundreds of thousands homeless. Trade volume is well above average.

APIs: crude oil +0.091; distillates +0.531; gasoline -0.458 million barrels vs previous week. Refinery utilization +2.4%

DOEs: crude oil +1.745; distillates -2.601; gasoline -4.174 million barrels vs previous week. Refinery utilization +1.4%

Forecasts: crude oil +1.000; distillates -1.500; gasoline -1.700 million barrels vs previous week. Refinery utilization -0.2%

Houston (ex-wharf indications 16-3)

380 cst $612
180 cst $633
MDO $938

Very tight avails for 180 cst

New Orleans (ex wharf indications 16-3)

380 cst $614
180 cst $635
MDO $941

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

Crude is back up, recouping from the losses with WTI +$0.74 Singapore paper is not yet reacting with -$9.50 for 180 cst and -$5.70 for 380 cst for Apr, and for May 180 cst -$8.30 and 380cst -$8.30 with MGO Apr contracts at +$1.69 and for May at +$ 1.74 The cargo market is losing with 180cst -$9.47, 380cst -$8.11 and MGO -$1.64.

The Singapore fuel oil markets were trading in mixed closing ranging -$0.50 to +$2.50 during the Platts window yesterday tracking the crude movement. The Asian Fuel Oil crack continues to gain strength as Japan may be soaking up barrels in light of their energy requirements. The bunker delivered premiums ranged from $6.00 to $9.50 above cargo price yesterday. Bunker fuel swaps lost more than $9.00/mt in the front of the curve and a bit less in the backend both in Rotterdam and Singapore. Both markets remain in backwardation, which is more pronounced in Singapore where Cal12 papers are assessed at a discount of more than $25.00/mt compared to spot prices (app. $10/mt discount in Rotterdam papers). This morning both markets are trading lower.

High premiums for prompt deliveries.

380 cst $630
180 cst $644
MDO $982

Fujairah (delivered indications 17-3)

380cst: $630
180cst: $647
MGO: $977

Rotterdam

Indications for delivered bunkers:

380cst: $597
(1.0%): $666
180cst: $618
(1.0%): $692 (very low avails)
MGO 0.1%S: $971