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Oil prices gained considerable ground this morning, lifted by gaining equities and a stronger Euro. Several resistance lines have been breached after technical buying provided for further upward potential.. Investors now look ahead to US economic data to be published in the afternoon.

After Iran has delayed the debate on an immediate suspension of oil deliveries to Europe market players took profit in electronic morning trading but prices soon rebounded to hit first resistance lines in London as the Iranian risk premium, the insolvency of Petroplus and South Sudan's problems with crude shipments lent support. In the evening a stronger dollar made oil futures more expensive for traders outside the U.S. , accelerating oil's late decline. Only when a strong support at 945.00 dollars for the gasoil and at 110.25 dollars for the brent halted the decline, did the oil complex recover in after-hour trading.

ICE Gasoil contract for February delivery settled at 952.75 dollars on Monday. This was 1.00 dollar below Thursday's settlement. With some 40,600 contracts the traded volume was significantly below average.

OPEC: The IMF expects Libya's oil output to amount to 1.35 mbpd in 2012, after the country's production was completely brought to its knees last year against the backdrop of the civil war. Libya's oil industry is quickly recovering and the increasing revenues through oil exports may provide a high potential of economic growth. Last year the Libyan economy weakened by 60%. According to IMF forecasts, the country's economy may rise by 70% this year, and by another 20% in 2013. Oil production may increase to 1.76 mbpd by 2014 which would be the pre-war level. The IMF sees an export share of 70%.

The two lines of the Stochastic oscillator at the WTI chart have converged, giving markets a first bullish signal, while the indicator at the ICE futures is still neutral. A short-term uptrend has formed at the gasoil chart but crude futures are in consolidation well within the limits of the lateral trend. Only if brent and WTi breach their resistances or if gasoil falls through the lower limit of the uptrend channel will there be fresh momentum in either direction.

U.S.

Nymex acces gaining. Oil futures are trading higher in Asian trading hours and on Globex electronic trading platform this morning, rebounding on technical buying orders and a rising dollar after the European summit. The traded volume is slightly below average. A string of important economic indicators might give some direction in the afternoon. Apart from that market players will eye the development of the euro today.

Survey of US Petroleum inventories due out tonight at 22:30(API) and Thursday at 17:00(DOE)

Crude oil +3.2; distillates -1.6; gasoline -0.2 million barrels vs previous week

Houston (ex-wharf indications 30-1)

380cst $680
180cst $716
MGO $1015

Very tight avails for 180 cst

New Orleans (ex-wharf indications 30-1)

380cst $682
180cst $719
MGO $1018

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

Crude is slightly up with WTI +$0.68. Singapore paper is mirroring crude, gaining only slightly with +$1.95 for 180cst and +$2.50 for 380cst for Feb, and for Mar 180 cst +$2.50 and 380cst +$2.00 with MGO Feb contracts at +$0.30 and for Mar +$0.28. The cargo market is mixed with 180cst -$6.20, 380cst -$6.21 and MGO +$0.84.

The Singapore fuel oil markets were down more than -$6.0 during the morning yesterday, tracking the crude movement. The Asian Fuel Oil crack remains firm as market is still tight despite the more incoming cargoes. The delivered bunker premiums were around $26.25 above cargo prices. Bunker fuel swaps lost $6.00-5.00/mt at the front and app.$4/mt at the backend of the forward curve. This morning markets are trading higher.

High premiums for prompt deliveries.

380 cst $728
180 cst $738
MGO $955

Fujairah (delivered indications 31-1)

380cst $730
180cst $755
MGO $1050

ARA (Amsterdam - Rotterdam - Antwerp)

Rotterdam high sulfur bunker prices were down Monday, with 380 CST material assessed at $676.50/mt compared with $685.50/mt Friday. A strike closed the port of Antwerp Monday, with no vessels loading and unloading during the day, but bunkering operations seem unaffected. Antwerp delivered 380 CST 3.5% bunker was assessed at $677.50/mt, down $8.00/mt from the previous assessment. High Chinese refinery demand is supporting the arbitrage to Singapore.

Rotterdam

Indications for delivered bunkers:

380cst : $ 670
(1.0 %) :$ 683
180cst: $ 692
(1.0 %):$ 733
MGO 0.1%S: $950