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As was to be expected, oil futures have risen on technical buying during morning trade. Despite an advancing dollar, they have pared some of yesterday's losses. Currently oil futures are however pulling back from their highs.

After a quiet and uneventful trade when oil futures traded in a narrow lateral range for most of the day, support lines were breached in late New York session despite a falling dollar and optimistic equity markets. Worries that the recent spike in oil prices would undermine global economic growth and dampen oil demand were boosted by figures showing that orders for durable goods in the US fell at the fastest pace in three years in January and gasoline and diesel retail prices reached a record high at this time of the year. The risk premium on oil resulting from Iran tensions remained unchanged as expected and due to a lack of fundamental news the strongly overbought markets tempted traders to take profit. Eventually the bearish technical constellation triggered a series of selling signals after the RSI had breached the 70% line.

ICE Gasoil contract for March delivery settled at at 1,022.25 dollars on Tuesday. This was 10.00 dollars below Monday's settlement. With some 51,700 contracts the traded volume was about on average.

Iran: According to recent reports and the Iranian central bank's gouvernor, Mahmoud Bahmani, Iran is to accept the currencies of the countries importing its oil and gold as means of payment for its oil deliveries. This development may affect the dollar's stance as the main currency in the oil market. The USA have already been displeased about the fact that India still imports oil from the Iran, against Washington's advice. Along with China, India is one of the main buyers of Iranian oil, buying oil worth some 12 billion dollars per year.

The Stochastic oscillator is still clearly bearish at all ICE and NYMEX charts. Except for the WTI crude, the RSI indicator fell through the 70% line at all charts yesterday, giving markets a selling signal. As expected the lower limits of the existing uptrend channels were breached in the process, triggering a technical selloff that boosted the downward correction. As markets are no more overbought, technical analysts forecast a minor upward correction today, yet there is still more downside to prices.

U.S.

Nymex acces gaining. Oil futures are edging higher in Asian trading hours and on Globex electronic trading platform this morning in a technical reaction to Tuesday's late losses and supported by figures showing U.S. consumer confidence rose to the highest level in a year, kindling hopes that oil demand will pick up. The traded volume is well above average. Market participants eye the release of the DOE data and a string of economic indicators today.

API's: Crude oil +0.5; distillates -0.2; gasoline +0.3 million barrels vs previous week. Refinery utilization -0.1%
DOE's; due out tonight
Forecasts: Crude oil +1.4; distillates -0.2; gasoline +0.3 million barrels vs previous week

Houston (ex-wharf indications 28-2)

380cst $722
180cst $763
MGO $1067

Very tight avails for 180 cst

New Orleans (ex-wharf indications 28-2)

380cst $724
180cst $766
MGO $1069

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

Crude is dropping like a stone with WTI -$1.45 Singapore paper is losing still with -$9.05 for 180cst and -$9.75 for 380cst for Mar, and for Apr 180 cst -$9.05 and 380cst -$9.75 with MGO contracts Mar -$1.55 and Apr -$1.50. The cargo market is now mirroring the bearishness with 180cst -$9.86, 380cst -$9.99 and MGO -$0.25.

The Singapore fuel oil markets fell more than -$9.75 yesterday morning, tracking crude movement. Despite the softening in the outright prices, buyers remain cautious fulfilling only requirements. The delivered bunker premiums stabilised to around $5.5 above cargo prices. Bunker fuel oil swaps lost up to $11/mt in the front for Singapore and a few dollars less for Rotterdam papers. Prices at the backend were stronger losing only $2-3/mt for both papers flattening the forward curve significantly. This morning both markets are trading lower.

High premiums for prompt deliveries. (Earliest delivery date: 2-3 March)

380 cst $720
180 cst $730
MGO $1000

ARA (Amsterdam - Rotterdam - Antwerp)

The week started with variable demand as a slight increase in outright 3.5% Rotterdam barges following a slight increase in crude prompted some buyers to fix their deals early in the day. Suppliers in reported bullish sentiment over the day in ARA. High sulfur fuel oil supplies in Rotterdam remained tight sources said while some suppliers in Antwerp reported good supply availability for prompt. Low sulfur fuel oil supplies in Antwerp however remained tight due to some shortages at local refineries. In the MOC hsfo was traded between 695.75-698 usd and lsfo between 746.25-753 usd.

Rotterdam

Indications for delivered bunkers:

380cst : $ 699
(1.0 %) :$ 750
180cst: $ 730
(1.0 %):$ 778
MGO 0.1%S: $1010