---

Oil futures edge lower on weaker equities European stock markets opened lower today, following the development of Asian markets. China stated its economy grew at the slowest pace in two years and U.S. crude stockpiles are forecast to increase.

Yesterday, oil prices were higher in electronic morning trading, supported by positive signs from the G20 summit that rekindled hopes the euro zone debt crisis could soon be fixed. Futures at the ICE breached first resistance lines. Profit taking and a worse-than-expected Empire State Manufacturing index weighed on the oil complex in the early afternoon and oil prices lost ground in the wake of a declining euro and equity markets' losses. When Germany dampened hopes that the European Union summit at the forthcoming weekend would not provide a definitive solution to the region's debt crisis, oil fell through support lines during the session in New Yorkand settled considerably lower.

ICE Gasoil contract for November delivery settled at 947.75 dollars on Monday. This was 4.25 dollars below Friday's settlement. With some 80,500 contracts the traded volume was well above average.

The Stochastic oscillator at the WTI chart is seen neutral this morning while the one at the ICE charts gave a clear selling signal Monday. Markets are still overbought, so more technical downside is seen. Analysts reckon that prices will consolidate in the morning with a tendency to the upside but the overall picture for today is rather bearish and futures are seen hitting Monday's lows in the course of the day. The downward correction would be all the more hefty should the RSI indicator fall through the 70% level. The WTI crude is supported at 85.85 dollars today, its first resistance is seen at 88.20 dollars. The Brent's first resistance is seen at 113.85 dollars, its first support is at 109.70 dollars.

U.S.

Nymex Access losing. Oil futures are little changed in East Asiaand Globex electronic trade this morning, lingering ahead of the figures on European economic sentiment which are regarded as more important than ever in view of the crisis. The traded volume is about on average with trading interest at the NYMEX shifting to the WTI December contract, the contract for November delivery expiring Thursday.

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

Crude oil +1.3; distillates -1.5; gasoline+1.6 million barrels vs previous week.

Houston (ex-wharf indications 17-10)

380cst $651
180cst $697
MGO $968

Very tight avails for 180 cst

New Orleans (ex-wharf indications 17-10)

380cst $653
180cst $700
MGO $971

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

Crude is dropping after the bullish run, losing with WTI -$1.95 Singapore paper is turning as well with -$14.70 for 180cst and -$14.45 for 380cst for Nov, and for Dec 180 cst -$14.70 and 380cst -$14.45 with MGO Nov contracts at -$3.16 and for Dec at -$3.15. The cargo market is bullish still with 180cst +$9.10, 380cst +$9.23 and MGO +$2.81.

The Singapore fuel oil markets rose $9.00 during the Platts window yesterday tracking the strong crude closing. The delivered bunker premiums were around $18.00 above the cargo prices yesterday as crude weakened considerably after the window. Demand is still robust despite the higher outright bunker prices. This morning both markets are trading lower.

High premiums for prompt deliveries.

380 cst $665
180 cst $673
MDO $900

Fujairah (delivered indications 18-10)

380cst $667
180cst $685
MGO $1050

Avails issue are sustaining the market.

ARA (Amsterdam - Rotterdam - Antwerp)

Demand in the main Northwest European bunker hubs remained supported Monday despite dwindling oil prices. Brent crude was trading at $111/barrel, down about $2/b from Friday’s settle as the market shook off the optimism that had preceded the weekend’s G20 finance ministers meeting and refocused on current global macroeconomic conditions. The high sulfur fuel oil prices remained strong on ongoing HSFO tightness triggering buying interest. Very tight availabilities and congestion keep underpinning the markets. In Antwerplow sulfur fuel oil shortages are reported due to some blending delays at one of the loading terminals.

Rotterdam

Indications for delivered bunkers:

380cst : $ 635
(1.0 %) :$ 656
180cst: $ 652
(1.0 %):$ 675
MGO 0.1%S: $ 941