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Crude futures have pulled back from their highs during morning trade. As expected, traders took some profit after yesterday's price rally whereas product futures already showed some downward corrections last night. The refinery operator Petroplus's credit crunch does not yet show any impact on prices but might become a bullish factor for Gasoil - in case Petroplus actually has to stop production. Meanwhile, investors focus is on the European debt crisis, as traders eye the auction of Italian bonds.

Oil futures traded in a narrow range Tuesday morning, as was expected. After the Christmas holidays and given the Bank holiday in the UK, many investors stayed at home. In a thin trade, market players were waiting for new impulsions, which were provided in the afternoon with a better-than-anticipated USconsumer confidence. First the WTI crude gained considerable ground. After ICE futures also breached their first resistance lines in the course of the afternoon, however, technical buying orders were triggered. This technical dynamism pushed oil prices until in the evening. Investors seized the high level during late trade and took some profit making heating oil and gasoline futures pull back from their highs. The Brent and the WTI crude stuck to their gains until this morning after the Iranian vice president threatened last night that the military might completely block the Hormus Strait.

ICE Gasoil contract for January delivery settled at 924.50 dollars on Tuesday. This was +10.00 dollars above Friday's settlement. With some 11,000 contracts the traded volume was far below average.

The stochastic indicator can already be interpreted as slightly bearish this morning. Technical analysts still assess the situation as neutral, however, given yesterday's price jumps. From the technical point of view the overbought situation and the stochastic indicator render possible a downward correction. Should prices rise above yesterday's high, technical buying orders are, however, likely to be triggered again.

U.S.

Nymex acces gaining. Oil futures edge higher in East Asia and on Globex electronic trading platform this morning. After some profit taking during Asian trade, oil futures slightly rise. The traded volume is far below average. Market participants eye the opening of European markets and the API's oil inventories forecast, to be published tonight at 10.30 p.m.

Survey of US Petroleum inventories due out tonight at 22:30(API) and Thursday at 17:00(DOE)
Crude oil -2.9; distillates -1.3; gasoline -0.9 million barrels vs previous week

Houston (ex-wharf indications 21-12)

380cst $628
180cst $664
MGO $956

Very tight avails for 180 cst

New Orleans (ex-wharf indications 21-12)

380cst $631
180cst $667
MGO $959

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

Crude is bouncing back up with WTI +$1.46. Singapore paper is reacting, gaining with +$2.25 for 180cst and +$4.00 for 380cst for Jan, and for Feb 180 cst +$2.30 and 380cst +$3.95 with MGO Jan contracts at +$0.22 and for Feb +$0.21. The cargo market is not yet reacting, losing only slightly with 180cst -$0.99, 380cst -$0.36 and MGO -$1.00.

The Singapore fuel oil markets on the other hand were slightly up during the Platts window last Friday. The delivered bunker premiums were around $20.0 above cargo prices. This morning markets are trading higher.

High premiums for prompt deliveries.

380 cst $676
180 cst $687
MGO $940

Fujairah (delivered indications 22-12)

380cst $684
180cst $710
MGO $1045

ARA (Amsterdam - Rotterdam - Antwerp)

Weaker 3.5% Fob Rotterdam barges and thin demand in Northwest Europeduring the morning hours of the last trading day before Christmas has put some pressure on the bunker prices. Rotterdam and Antwerp continued to report high and low sulfur fuel oil supplies for prompt due some VLCCs fixtures this week.

Rotterdam

Indications for delivered bunkers:

380cst : $ 627
(1.0 %) :$ 672
180cst: $ 642
(1.0 %):$ 692
MGO 0.1%S: $920