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Technical indicators: neutral to bullish

Oil levels rose in electronic morning trading as the Euro regained ground against the dollar, breaching several resistance lines in the process. At midday, prices shed some of their gains but are still hovering above their first resistance levels.

Yesterday oil futures traded in a tight range during a quite electronic trading on Monday with most market participants still away on holiday. The whole complex then collapsed after the opening of NYMEX session, the little volume accounting for the hefty losses. The weak dollar and little trading interest limited the losses and the WTI crude's 111.0 dollar support proved strong.

OPEC members with spare capacity are ready to pump above agreed limits if there is a need, but it seems unlikely that a formally change of output targets will be announced at the next meeting in June. In February top producer Saudi Arabia raised output above 9 million barrels per day, around a million bpd more than its OPEC output limit, in response to supply disruption in OPEC member Libya that drove oil prices to their highest since the record rally of 2008. But in March, Saudi Arabia scaled back to around 8.3 million bpd.

ICE Gasoil contract for May delivery settled at 1,009.25 dollars Monday night. This was 4.75 dollars below Friday's settlement. Volume with some 14,200 deals far below average.

The Stochastic indicator on the gasoil, WTI and brent chart gave a selling signal Monday and is clearly bearish this morning. The RSI on the WTI crude chart could give more bearish signals in the course of the day, should it fall below the 70% line. Technical analysts see prices consolidating today. The first support for the WTI crude is seen at 111.00 dollars, the first resistance at 112.30 dollars. The Brent's first resistance is seen at 123.75 dollars, its first support is at 122.70 dollars. The 111.00 dollar support at the WTI chart is seen as a key support, below which more technical selling orders will be triggered.

U.S.

Nymex Access losing. Oil prices fell in East Asia and Globex electronic trading this morning, WTI crude dropping to near 111.00 dollars a barrel, as the stronger dollar made crude more expensive for investors with other currencies. The traded volume is below average.

Survey of US petroleum inventories due out tonight at 22:30 (API) and Wednesday at 16:30 (DOE):
crude oil +1.1; distillates +0.6; gasoline -1.0 million barrels vs previous week.

Houston (ex-wharf indications 25-4)

380 cst $660
180 cst $695
MDO $1017

Very tight avails for 180 cst

New Orleans (ex wharf indications 25-4)

380 cst $663
180 cst $697
MDO $1019

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

Crude is losing somewhat after last week's bullishness with WTI -$0.65 Singapore paper is mixed, looking for direction with -$1.25 for 180 cst and +$0.70 for 380 cst for May, and for Jun 180 cst -$0.90 and 380cst +$0.20 with MGO May contracts at -$1.00 and for Jun at -$ 0.10 The cargo market is looking for direction as well with 180cst +$2.79, 380cst +$0.70 and MGO -$0.69.

The Singapore fuel oil markets were up marginally ranging $0.70 to $3.00 yesterday during the Platts window. The Singapore heavy residual inventory reported a build of +1.66 mbbl to 23.04 mbbl which is the highest in six months. The incoming for the last one month period was estimated at 4.4 to 4.5 million mt. The bunker delivered premiums were around $7.00 above cargo prices yesterday. This morning both markets are trading slightly higher.

High premiums for prompt deliveries.

380 cst $678
180 cst $694
MDO $1035

Fujairah (delivered indications 26-4)

380cst: $675
180cst: $700
MGO: $1040

Rotterdam

Indications for delivered bunkers:

380cst: $650
(1.0%): $707
180cst: $675
(1.0%): $734 (very low avails)
MGO 0.1%S: $1023