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Technical indicators: neutral to bearish

Oil prices have gained some ground during morning trade but are currently pulling back from their intraday highs. Impetus is provided by European equity markets, which are also losing some of their earlier gains after EU and German economic indicators have turned out disappointing. Market participants look ahead to more economic data to be published in the afternoon, as well as to news regarding the development in Libya .

Oil prices dropped in electronic morning trading Yesterday on hopes that the civil war in Libya will come to an early end and oil flow from the region will be quickly resumed. When traders realized that it will take months, if not years, to restore the country's oil infrastructure and eventually Saudi Arabia said that it would adjust its oil output as soon as oil flow from Libya has been resumed, prices pared earlier losses, rising throughout NYMEX session, only stopped by strong Brent (920.00 dollars) and gasoil (108.75 dollars) resistance lines, while the WTI crude breached various resistances in the process.

OPEC members have ruled an emergency meeting to discuss output quota, the cartel not being worried about the current price level, according to an OPEC delegate. The cartel still producing far above quota, experts are sure that output will be cut even without an emergency meeting, should oil prices fall further.

ICE gasoil for September delivery settled at 915.50 dollars on Monday. This was 2.50 dollars below Friday's settlement. With some 70,900 contracts the traded volume was above average.

The stochastic indicator at the NYMEX and ICE charts gave a buying signal yesterday while the RSI is set to exceed the 70% line. Technical analysts forecast that prices will hit resistance lines today, but a string of important economic indicators might limit the upward potential. The first support for the WTI crude is seen at 83.00 dollars, its first resistance at 85.80 dollars. The Brent's first resistance is seen at 109.00 dollars, its first support is at 105.25 dollars.

U.S.

Nymex Access gaining: Oil futures rose in East Asia and Globex electronic trading this morning, extending Monday's gains as traders keep covering short positions. The traded volume is well above average. A string of European and US economic indicators to be released today will give direction.

Houston (ex-wharf indications 22-8)

380 cst $618
180 cst $653
MDO $934

New Orleans (ex wharf indications 22-8)

380 cst $621
180 cst $656
MDO $937

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

Crude is gaining bullish momentum with WTI +$3.13. Singapore paper is reflecting it gaining as well with +$14.95 for 180cst and +$15.25 for 380cst for Sep, and for Oct 180 cst +$13.80 and +$14.00 for 180cst with MGO Sept contracts at +$2.26 and for Oct at +$2.26. The cargo market is starting to react to the bullishness, gaining with 180cst +$3.88, 380cst +$2.98 and MGO +$0.82.

The Singapore fuel oil markets were up more than $3.00 on the start of the week tracking crude during the Platts window. The delivered bunker premiums were hovering around $14.00-15.00 above cargo prices as sellers interest waned. The Singapore market has been firm as robust bunker demand coupled with limited incoming cargoes have narrowed the demand and supply gap, supportive of fuel oil prices. This morning both markets are trading higher.

High premiums for prompt deliveries.

380 cst $660
180 cst $649
MDO $911

Fujairah (delivered indications 23-8)

380 cst $658
180 cst $681
MDO $1064

Rotterdam

Yesterday in the MOC hsfo was traded between 605-606.50 usd and lsfo between 627-636 usd.

Indications for delivered bunkers:

380cst : $ 622
(1.0 %) :$ 649
180cst: $ 645
(1.0 %):$ 678
MGO 0.1%S: $ 930