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Oil futures have traded in a narrow range during morning trade, slightly retreating around midday. The WTI crude has briefly fallen below its first support. The dollar's sharp rise against the euro also weighs on oil futures. Ahead of the weekend investors will probably build some short positions. If supports are breached on the long run afterwards, further stop-loss orders might be triggered. Losses should be limited though, given the persisting fears of supply shortages and the geopolitical insecurities.

Despite positive sentiment at European equity markets, oil prices stayed in a narrow lateral range for most of the day, lingering in a quiet and rather uneventful trade as technical analysts had expected. Minor gains after the opening of NYMEX session were quickly erased. A converse purchasing managers index from China's manufacturing sector upset markets. While the HSBC's index was published with 49.6, signalling a contraction, official government data said the manufacturing PMI was at 51. Neither were several Euro zone and US indicators that were on the agenda yesterday able to inspire investors. The market began then rising sharply just before the close and continued in after-hours trading following a report of a pipeline explosion in Saudi Arabia. Before the report rattled markets, a strong rise in Brent pulled the WTI crude higher despite weak supply-and-demand fundamentals in the U.S., with some noting the price was out of sync with the economic reality on the ground in the U.S. and Europe. Though there was little news of new developments with Iran, market participants said the escalating standoff between it and Western nations over its nuclear program was increasing concerns that oil supplies would be impacted in some way. Despite the Saudi government denied the explosion, oil futures in London and New York rose to fresh highs.

ICE Gasoil contract for March delivery settled at at 1,009.50 dollars on Thursday. This was 6.75 dollars above Wednesday's settlement. With some 54,300 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 the expected consolidation in electronic trading and after the opening of NYMEX session, the Stochastic oscillator gave a buying signal at all charts last night after its two lines had crossed. The RSI indicator is trying the 70% line which at the brent chart is has already breached. Medium-term uptrends were breached in London and New York, opening more upside to prices. Crude oil is seen rising as high as 112.00 to 114.00 dollars. Still, after yesterday's overdone gains prices are seen in consolidation with a bearish tone this morning.

U.S.

Nymex acces easing. Oil futures lost some ground in Asian trading hours and on Globex electronic trading platform this morning, taking their breath after Wednesday's overdone gains, when Saudi oil officials denied earlier reports about an oil-pipeline attack. The traded volume is below average. Due to a lack of important economic indicators investors will eye forex markets and equities for direction.

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 bouncing up strong with WTI +$1.36 Singapore paper is reacting to the renewed bullishness with +$17.50 for 180cst and +$17.75 for 380cst for Mar, and for Apr 180 cst +$17.50 and 380cst +$17.75 with MGO contracts Mar +$1.78 and Apr +$1.78. The cargo market is mixed with 180cst +$4.24, 380cst +$6.39 and MGO -$1.28.

The Singapore fuel oil markets rebounded by more than +$3.0 during yesterday morning. The Singapore heavy residual inventory reported a slight build of +0.06 mbbl to 21.80 mbbl. The delivered bunker premiums remain around $5.0 above cargo prices yesterday. Bunker fuel swaps gained strongly yesterday largely following crude. Front of the curve was much stronger while prices at the end of the curve lagged. Gains of 2012 papers were almost half of the numbers at the front of the curve. Markets are trading up this morning.

High premiums for prompt deliveries.

380 cst $740
180 cst $751
MGO $1000

ARA (Amsterdam - Rotterdam - Antwerp)

High sulfur prices gained ground on rising crude prices and tight supply, with the ARA markets tracking firming crude numbers. Rotterdam and Antwerp low sulfur bunker prices fell off slightly from the previous day’s surge, but supply remained restricted.

Rotterdam

Indications for delivered bunkers:

380cst : $ 718
(1.0 %) :$ 765
180cst: $ 736
(1.0 %):$ 780
MGO 0.1%S: $1015