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Oil prices have initially edged higher during morning trade but remained within their range erasing most of their gains again before midday. Futures kept track of foreig exchange. The tensions between the Iranand the Western states still slightly supported prices. According to analysts, the bullish potential of the current geopolitical risks ebbs, however. Without new signs of escalation further upward movement is unlikely, they say. In this case, markets may turn to bearish news regarding the European debt crisis again. Meanwhile Nigerian unions have threatened to hamper oil production. If they do, this might again support prices.

Yesterday, oil futures rose in London and New York, breaching several short-term resistances in the process. The strong rise in European and US equities and the increasing tensions over Iran's nuclear programme provided most of the bullish momentum as market participants got no fresh stimulus from forex markets where the dollar had halted its rally, consolidating on its high level. As last week's highs were not hit, investors took some profit in late trading but this could not prevent the oil complex from settling higher both in New York and London.

The implementation of a second plant for uranium enrichment exacerbated the dispute with Western powers that suspect Tehran is seeking a nuclear weapons capability. The plant is able to carry out uranium enrichment to a fissile purity of 20 percent which is necessary to achieve weapons-usable fissile material. The site is out of harm's way deep inside a mountain. While Iranclaims that the uranium is meant for civilian use only, Israelhas threatened to take military action should Tehran build nuclear weapons.

ICE Gasoil contract for January delivery settled at 959.00 dollars on Monday. This was 1.75 dollars below Friday's settlement. With some 39,000 contracts the traded volume was below average.

Neither the Stochastic oscillator nor the RSI are giving any clear signals this morning. So technical analysts assess the situation still as neutral and see prices consolidating on their high level. The current market situation is dominated by the fundamentals. The existing trendchannels have room to the downside and to the upside and technically driven orders will only be triggered above or below resistance and support lines. NYMEX crude is likely to consolidate in the range of 110.00 to 103.75 dollars. The WTI crude's first support is seen at 101.30 dollars today, its first resistance at 103.35 dollars. The Brent's first support is seen at 112.40 dollars, its first resistance at 113.80 dollars.

U.S.

Nymex acces gaining. Oil futures are recovering on Globex electronic trading platform from their losses in early Asian trading hours when the brent slipped below 113.00 dollars as Europe's debt crisis and expectations of a rise in oil inventories in the United Statesfor the third straight week overshadowed concerns of supply disruption from Iranand Nigeria. The traded volume is about on average. There are no important economic indicators on the agenda today, so market participants will eye DOE data and fundamentals for direction.

API's: Crude oil +0.4; distillates +0.8; gasoline +1.9 million barrels vs previous week. Refinery utilization +1.1%
DOE's; due out tonight
Forecasts: Crude oil +0.7; distillates +1.8; gasoline +2.1 million barrels vs previous week.

Houston (ex-wharf indications 9-1)

380cst $673
180cst $708
MGO $1012

Very tight avails for 180 cst

New Orleans (ex-wharf indications 9-1)

380cst $676
180cst $710
MGO $1015

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

Crude is bouncing up with WTI +$0.34. Singapore paper is reacting to this turn, gaining with +$13.25 for 180cst and +$11.95 for 380cst for Jan, and for Feb 180 cst +$11.50 and 380cst +$11.70 with MGO Jan contracts at +$0.30 and for Feb +$0.79. The cargo market is mixed with 180cst +$7.10, 380cst +$4.26 and MGO +$0.14.

The Singapore fuel oil markets rebounded more than +$4.0 during the Platts window yesterday. There was a strong interest in buying the fuel oil swaps which narrowed the Asian Fuel Oil crack sharply. The delivered bunker premiums were seen to slip to around $20.0 above cargo prices. Bunker fuel swaps gained in a range of $15.00-7.00/mt along the curve both for Rotterdam and Singapore papers with gains on the higher side at the front of the forward curve. East/West spread broadened again, trading around $45 for February. Viscosity spread between 180cst and 380cst papers widened notably especially in the front, trading above $13/mt for February. Both markets are trading higher this morning.

High premiums for prompt deliveries.

380 cst $723
180 cst $733
MGO $960

Fujairah (delivered indications 11-1)

380cst $731
180cst $755
MGO $1055

ARA (Amsterdam - Rotterdam - Antwerp)

The Rotterdam bunker fuel market stayed strong at the start of the week, despite Brent crude oil falling — outright prices for 380CST high sulphur delivered bunker were up $1.00/mt to $672.50/mt, on Monday. Traders continued to see bunker prices as supported by strong fuel oil fundamentals.

Rotterdam

Indications for delivered bunkers:

380cst : $ 690
(1.0 %) :$ 704
180cst: $ 698
(1.0 %):$ 722
MGO 0.1%S: $975