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After having dropped to intraday lows on a stronger dollar oil prices compensate earlier losses at middayto trade marginally higher. As analysts expected Wednesday's highs were hit but, except for the brent contract, could not yet be breached. Even though a strong rise in equities helped oil up from intraday lows, it cannot really lift investor's spirit for the time being. Neither does Iran's threat to halt oil shipments to the European Union lend some support. Only after the gasoil and the WTI crude have managed to breach their first resistance lines will there be more buying orders triggered.

ICE Gasoil contract for February delivery settled at 942.25 dollars on Wednesday. This was 0.50 dollars above Tuesday's settlement. With some 38,100 contracts the traded volume was significantly above average.

Oil prices traded in a narrow range Wednesday morning in electronic trading before loosing ground on the weak performance of the European equity markets and the ailing euro. The thin volume at this time and the API's rather bearish petroleum report of the night before amplified the selling pressure. When the DOE released its weekly report on petroleum stockpiles, the oil complex surged as the data were initially considered bullish. Still, momentum did not last and prices zigzagged in a volatile market, getting some support later in the session from the FED's announcement to leave core interest rates at their historically low level for an extended period of time. Eventually oil futures settled marginally higher in London and new York.

OPEC: The Iranian parliament is set to debate a plan to abruptly halt Tehran's oil exports to the European Union, in a bid to pre-empt a phased European Union embargo on Iranian oil imports starting the first of July. But the Iranian lawmakers are seeking an abrupt interruption that would not allow a smooth transition to other crudes and potentially push prices up. Not only Iran's oil exports to Europewill be stopped until the next five years, but Iran's exports to Europewill also stop, according to a lawmaker. Iran exports mostly oil to Europe but also some petrochemicals. At the same time Tehrancalled on OPEC to prevent Saudi Arabiafrom hiking its output.

While the Stochastic oscillator at the brent chart doesn't give any clear signals yet, the ones at the gasoil and WTI charts have entered bullish territory. Technical analysts see oil prices hitting Wednesday's highs today and more upside until second resistance lines (111.15 dollars brent, 101.10 dollars WTI) should those marks be breached.

U.S.

Nymex acces gaining. Oil futures are little changed vs last night in Asian trading hours and on Globex electronic trading platform this morning, taking their breath after Wednesday's volatile session. The traded volume is slightly below average. Market players will eye a string of economic indicators for direction today.

API's: Crude oil +7.3; distillates -2.5; gasoline -0.6 million barrels vs previous week. Refinery utilization -1.2%
DOE's; Crude oil +3.6; distillates -2.5; gasoline -0.4 million barrels vs previous week. Refinery utilization -1.5%
Forecasts: Crude oil +2.2; distillates -0.2; gasoline +1.7 million barrels vs previous week

Houston (ex-wharf indications 25-1)

380cst $668
180cst $704
MGO $1003

Very tight avails for 180 cst

New Orleans (ex-wharf indications 25-1)

380cst $670
180cst $706
MGO $1005

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

Crude is bouncing back up with WTI +$0.85. Singapore paper is mirroring crude with +$5.95 for 180cst and +$5.95 for 380cst for Feb, and for Mar 180 cst +$6.10 and 380cst +$5.75 with MGO Feb contracts at +$0.36 and for Mar +$0.33. The cargo market is only now starting to react to bearish start of the week, losing with 180cst -$7.50, 380cst -$7.23 and MGO -$1.05.

The Singapore fuel oil markets lost steam on the first day back from the Chinese New Year holidays yesterday, dropping $4.50 during the morning. Despite that, market shows no sign of easing, with tightness of supplies which looks to continue well into February. The delivered bunker premiums were around $24.0 above cargo prices yesterday. Bunker fuel oil swaps gained in a range of $1.50-5.75/mt along the curve. Prices were slightly stronger at the front of the forward curve maintaining an attractive backwardation as 2013 papers are traded at more than $100/mt discount against spot prices. This morning markets are trading higher.

High premiums for prompt deliveries.

380 cst $725
180 cst $740
MGO $940

Fujairah (delivered indications 26-1)

380cst $727
180cst $752
MGO $1045

ARA (Amsterdam - Rotterdam - Antwerp)

High sulfur bunker fuel prices in the ARA firmed late Wednesday, following a steeper backwardation on the 3.5% Rotterdam barge market prompted by very tight supplies. Even though crude is weaker, the market in ARAis firming due to product shortage. With continuing congestion and tight supplies only adding to the current bullishness. The market is supported by new fixtures for Singapore, with Koch, Eni and Litasco fixing some Suezmax on subjects, as well as there being a VLCC still to load.

Rotterdam

Indications for delivered bunkers:

380cst : $ 678
(1.0 %) :$ 683
180cst: $ 685
(1.0 %):$ 726
MGO 0.1%S: $955