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Oil prices have exceeded their first resistance lines this morning, supported by the Iran conflict and by positive signals from China, where the PMI of the manufacturing sector has climbed to 49.9 points (after 48.8 in the previous month). Although a reading below 50 points indicates a retreat of economic activity, investors embraced the latest figures. The WTI crude rose only slowly, as the Iran conflict does not impact the American crude as much as others.

After Tuesday's late losses, oil prices rose in electronic morning trading within the existing uptrends and carefully breached first resistance lines at the ICE at midday. Trader's optimism at this time of the day boosted the euro and equity markets and also lifted the oil complex. More bullish momentum hit the markets when preliminary figures showed that US GDP rose modestly in the 4th quarter. When FED chief Ben Bernanke in his speech later in the day destroyed hopes of more economic stimulus measures and the DoE reported a much higher-than-expected build in US crude oil stocks, investors sold their long positions and oil futures breached several support lines in a hefty technical sell-off. While WTI and brent crude and the gasoline contract rebounded in the final few minutes of the session in New York as concerns about a supply disruption from Iran continued to weigh on the market and left traders wary of placing bets on lower prices, gasoil in London and heating oil in New York settled lower. Against this backdrop, US employment figures and home construction will be of some importance for the oil complex today.

ICE Gasoil contract for March delivery settled at at 1,002.75 dollars on Wednesday. This was 19.50 dollars below Tuesday's settlement. With some 55,300 contracts the traded volume was above 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.

After more important support lines were breached Wednesday, both the Stochastic oscillator and the RSI indicator stay bearish at the charts. But the downward correction of the past days has wiped out most of the bearish potential and the Stochastic indicator is nearing the oversold level. So technical analysts forecast a consolidation in the morning.

U.S.

Nymex acces gaining. Oil futures little changed vs last night in Asian trading hours and on Globex electronic trading platform this morning, taking their breath after Wednesday's late gains as market participants are looking for direction. The traded volume is above average. A string of important economic indicators is on the agenda today that could well have some influence on oil prices in the afternoon.

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

DOE's; Crude oil +4.2; distillates -2.1; gasoline -1.6 million barrels vs previous week. Refinery utilization -1.9%

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 losing still, but is less bearish with WTI -$0.27 Singapore paper is turning with +$3.80 for 180cst and +$6.55 for 380cst for Mar, and for Apr 180 cst +$2.85 and 380cst +$2.70 with MGO contracts Mar -$1.00 and Apr -$0.98. The cargo market is now gaining bearish momentum with 180cst -$9.65, 380cst -$10.05 and MGO -$1.58.

The Singapore fuel oil markets lost another $9.50/mt yesterday morning. Market is supplied well at the moment while demand was lagging, resulting in a degree of pressure on prices. The delivered bunker premiums were around $5.0/mt above cargo prices. Bunker fuel swaps lost two digits at market close yesterday following a weakness of crude futures. Front of the curve took a much heavier beating compare to the back of the curve cutting almost $5/mt from the backwardation discount for the next year in one day only. This morning markets are trading strongly up.

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

380 cst $722
180 cst $734
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.

Rotterdam

Indications for delivered bunkers:

380cst : $ 707
(1.0 %) :$ 762
180cst: $ 729
(1.0 %):$ 776
MGO 0.1%S: $1005