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Technical indicators: neutral to bullish

Oil prices are consolidating in Asia Tuesday after the Japanese government approved the release of more oil reserves to aid quake- and tsunami-stricken areas, but prices were likely to stay supported by U.S.-led air strikes in Libya, which may lead to a prolonged military campaign and further disruption of oil supplies.

Oil prices climbed as traders prepare for prolonged fighting in Libya and continued to worry about supply disruptions that might occur elsewhere in the region. International forces smashed Libya's air defenses over the weekend, and a top French official said Monday that international intervention could last "a while."

Opec has revised its global economic growth upwards and says the world economy has continued to enjoy a “solid recovery” despite the social unrest in some parts of the Middle East and North Africa and the Japanese disaster. Opec increased its forecast for 2011 world economic growth by 0.1 per cent to 4 per cent in view of the healthy growth in the developing countries.

ICE Gasoil contract for April delivery settled at 978.25 dollars Monday night. This was 6.00 dollars above Friday's settlement. Volume with some 59,100 deals on average.

The Stochastic for Brent, Gasoil and WTI remain bullish for today, while the RSI is not giving a clear signal to the market. Oil prices are expected to rise and resistance lines will be tested, should those be breached, many buying orders will be triggered. The first support for the WTI crude is seen at 101.00 dollars, the first resistance at 103.65 dollars. The Brent's first resistance is seen at 117.30 dollars, the first support is at 113.25 dollars.

U.S.

Nymex Access losing. Oil prices are declining slightly this morning technically, traders mulled how long Libyan oil exports will remain shut down amid a third night of allied attacks on forces loyal to Gadhafi. Trade volume is below average.

Survey of US petroleum inventories due out tonight at 22:30 (API) and Wednesday at 16:30 (DOE): crude oil +2.0; distillates -1.4; gasoline -1.9 million barrels vs previous week.

Houston (ex-wharf indications 21-3)

380 cst $613
180 cst $634
MDO $984

Very tight avails for 180 cst

New Orleans (ex wharf indications 21-3)

380 cst $616
180 cst $637
MDO $987

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

Crude is losing still with WTI -$0.62 Singapore paper is slowing with -$2.60 for 180 cst and -$2.45 for 380 cst for Apr, and for May 180 cst -$2.55 and 380cst -$2.25 with MGO Apr contracts at -$0.23 and for May at -$ 0.21 The cargo market has adopted the bearishness with 180cst -$10.43, 380cst -$10.07 and MGO -$1.75

The Singapore fuel oil markets came off more than $10.00/mt during the Platts window despite the strong crude as Asian Fuel Oil crack weakened. The bunker delivered premiums were around $10.00 above cargo price yesterday. There were some levels of market expectation that April market will be tighter as lack of on specs bunker grade products continued to support the underlying fundamentals. Bunker fuel swaps lost app. $1.00/mt along the curve both in Rotterdam and Singapore. Both markets remain backwardation with Singapore Cal 12 papers trading at a discount of more than $25.00/mt versus spot prices. Both markets are traded lower today.

High premiums for prompt deliveries.

380 cst $634
180 cst $649
MDO $992

Fujairah (delivered indications 22-3)

380cst: $632
180cst: $663
MGO: $980

Rotterdam

Indications for delivered bunkers:

380cst: $603
(1.0%): $673
180cst: $629
(1.0%): $656 (very low avails)
MGO 0.1%S: $992