---

Technical indicators: neutral to bullish

Oil prices edged higher during early morning trade on a retreating dollar. With US vacations having only begun, US-citizens are using their cars more often, according to market participants. During the summer months the demand for fuels usually increases and refineries work at full capacity. The increase in demand might trigger draws in gasoline and crude stocks .

Technical Monday morning, the progressing dollar triggered some profit taking throughout the oil complex. In the course of the afternoon temporary supports formed at 970 dollars for Gasoil, 116.15 dollars for Brent and 96.50 dollars for WTI Crude. These proved strong for a long time. The still unresolved debt situation in Europe and the USA reduced investors' readiness to take risks, leading to profit taking regarding riskier assets like stocks and commodities. With Wall Street opening in the red, oil futures received a necessary impetus around 4 p.m. to head for their support areas. ICE Brent even broke away from the given technical triangle, which led to more technical selling in the evening. The Euro gaining some ground again during late evening trade, respectively some profit taking regarding the dollar, stopped this downward correction, slightly lifting oil prices again. At the end of the day, oil futures settled lower, however, making way for further downward potential.

ICE Gasoil contract for July settled at 967.50 dollars on Monday. This was 9.75 dollars below Friday's settlement. With some 45,500 contracts, the traded volume was below average.

OPEC: venezuela 's crude proven oil reserves surpassed those of Saudi Arabia in 2010, the OPEC said in its annual statistical bulletin. The boost in reserves, which comes alongside an upgrade from Iran and Iraq , may empower members of the group who favour a defense of high prices in the long run. But there has been doubts over whether all of Venezuela 's heavy oil is actually viable economically. In an annual statistical report posted on its website, OPEC said Venezuela 's proven crude oil reserves had reached 296.5 billion barrels in 2010, up 40.4% year-on-year and higher than Saudi Arabia 's 264.5 billion barrels. The data broadly confirms Venezuela 's statements which had already said it had reached this level of reserves in January this year.

The stochastic indicator is slightly bearish this morning for Brent, Gasoil and WTI Crude. The RSI for Brent also gives a selling signal, whereas the indicator does not give any impetus to the markets. After Brent breached the support lines provided by the technical triangle as well as by the upward channel, new downward potential developed. Chart analysts therefore assess the situation as slightly bearish. According to analysts there will be some possibility for a correction down to 113.40 dollars regarding Brent, defining the lower edge of the medium-term range The first support for the WTI crude is seen at 94.70 dollars, its first resistance at 97.15 dollars. The Brent's first resistance is seen at 117.50 dollars, its first support is at 114.65 dollars.

U.S.

Nymex Acces gaining. Oil prices hardly changed during electronic morning trade. In the early morning, oil futures traded in a tight range sideways. The volume traded at NYMEX is clearly below average. Market participants wait for the opening of the European markets and for further momentum from foreign exchange.

Survey of US Petroleum inventories due out tonight at 22:30 (API) and Wednesday at 16:30 (DOE)

Crude oil -1.2; distillates +0.8; gasoline +/- 0.0 million barrels vs previous week.

Houston (ex-wharf indications 18-7)

380 cst $648
180 cst $679
MDO $1004

Very tight avails for 180 cst

New Orleans (ex wharf indications 18-7)

380 cst $651
180 cst $682
MDO $1008

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

Crude is easing, losing some of it's recent gains with WTI -$0.33. Singapore paper is cautiously tracking crude with +/- $0.00 for 180cst and -$0.15 for 380cst for Aug, and for Sep 180 cst +$0.65 and 380cst +$0.70 with MGO Aug contracts at +$0.19 and for Sep at +$0.16. The cargo market is now reacting to Yesterday's gains with 180cst +$9.15, 380cst +$8.84 and MGO +$1.25.

Singapore fuel oil markets fell more than -$7.0/mt during the Platts window last Friday on weaker crude during the window. The Singapore heavy residual inventory reported a draw of -1.67 mbbl to 17.51 mbbl. The delivered premiums inched up to around $7.5/mt above cargo prices last Friday on stronger demand. Bunker swaps gained few dollars both in Rotterdam and Singapore . Prices were stronger in the front of the curve compared to 2012 and forward. This morning markets are trading down.

High premiums for prompt deliveries.

380 cst $669
180 cst $679
MDO $968

Fujairah (delivered indications 19-7)

380 cst $680
180 cst $711
MDO $1060

ARA (Amsterdam - Rotterdam - Antwerp)

Rotterdam

Indications for delivered bunkers:

380cst : $ 656
(1.0 %) :$ 699
180cst: $ 674
(1.0 %):$ 719
MGO 0.1%S: $ 981