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During the morning, oil futures pulled back from their highs. The support at 96.60 dollars for NYMEX C.Oil has been tested but has remained strong up to now.

Despite a rather bearish technical constellation oil prices rose in electronic morning trading Wednesday when the Brent and the gasoil contract at the ICE failed to breach their first support lines and a strongly rising euro lent additionnal support. Positive European indicators and increased optimism that Greece will avoid a default had tempted traders to invest into riskier assets such as the euro. In the afternoon, morose US indicators that lifted the dollar as a safe-haven currency and the bearish report of the DOE on US petroleum stockpiles dampened investors' hope and profit taking set in. The crude oil at the NYMEX lost considerably more ground than did the brent in New York, falling through several support lines and widening the front-month spread between the two crudes to more than 14 dollars.

ICE Gasoil contract for February delivery settled at 955.25 dollars on Wednesday. This was 6.00 dollars above Tuesday's settlement. With some 38,300 contracts the traded volume was significantly below average.

OPEC: Iraq does not intend to replace Iranian crude oil following the imposition of foreign sanctions. None of the European countries who used to buy Iranian oil has asked Iraq for replacement, so an official who also said that Iraq has no spare oil to replace the Iranian crude and that all volumes of Iranian crude are sold through term contracts for the current year. Figures show that production from OPEC's 12 members was up 75,000 barrels a day to 31.165 million barrels a day of oil in January (incl. Iraq). The output level remained about 1 million more than the 30 million barrels a day OPEC agreed to produce at a meeting last December and increased despite lower demand in the first half of this year. Production increases are seen in Libya, Iraq, Kuwait, Angola and Qatar.

The Stochastic oscillator is still bearish at all charts today, but its two lines are converging. The Brent's and the gasoil's short-term support lines resisted the Stochastic's selling signals and remained strong Wednesday. So technical analysts see oil's downside limited today. Should the lines be breached, however, a string of technical selling orders would be triggered. But as the U.S. dollar had a great influence on oil prices lately and important U.S. jobs data will be eyed today and tomorrow, the impact of the technical indicators is weakening and so the overall situation is seen rather neutral this morning.

U.S.

Nymex acces gaining. Oil at the ICE is rising in Asian trading hours and on Globex electronic trading platform this morning in a technical reaction to Wednesday's losses while NYMEX futures stay depressed by the strong rise in US petroleum stockpiles. The traded volume is about on average. US jobless claims being released in the afternoon will be eyed as an important indicator for economic health.

API's: Crude oil +2.1; distillates +1.0; gasoline -0.2 million barrels vs previous week. Refinery utilization -0.0%
DOE's; Crude oil +4.2; distillates -0.1; gasoline +3.0 million barrels vs previous week. Refinery utilization -0.4%
Forecasts: Crude oil +3.2; distillates -1.6; gasoline -0.2 million barrels vs previous week.

Houston (ex-wharf indications 1-2)

380cst $676
180cst $712
MGO $1027

Very tight avails for 180 cst

New Orleans (ex-wharf indications 1-2)

380cst $678
180cst $714
MGO $1029

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

Crude is gaining bearish momentum, losing with WTI -$1.30. Singapore paper is gaining, despite crude's losses with +$2.25 for 180cst and +$3.00 for 380cst for Feb, and for Mar 180 cst +$3.45 and 380cst +$3.55 with MGO Feb contracts at +$0.35 and for Mar +$0.38. The cargo market is gaining only slightly with 180cst -$3.55, 380cst -$1.85 and MGO -$0.09.

The Singapore fuel oil markets were down ranging from -$3.5 to -$2.0 during the morning yesterday. Market remains tight in the short term with supplies easing going forward in the month. The delivered bunker premiums were assessed in a range of $25.0- 28.0 above cargo prices yesterday. Bunker fuel oil swaps gained over $10/mt at the front. Gains at the backend of the forward curve were slightly lower ranging from $6.0-4.25/mt. This morning markets are trading lower.

High premiums for prompt deliveries.

380 cst $725
180 cst $735
MGO $950

Fujairah (delivered indications 1-2)

380cst $723
180cst $747
MGO $1048

ARA (Amsterdam - Rotterdam - Antwerp)

The Rotterdam bunker fuel market rebounded Yesterday, with with the typical trend seen of buyers entering the market as crude oil rises. High Chinese refinery demand is supporting the arbitrage to Singapore.

Rotterdam

Indications for delivered bunkers:

380cst : $ 675
(1.0 %) :$ 688
180cst: $ 689
(1.0 %):$ 708
MGO 0.1%S: $955