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Oil futures have lost more ground in the course of the morning on technical profit taking. The WTI crude has briefly fallen below its first support, whereas supports at ICE proved strong. Lower growth forecasts for China have dampened investors risk appetite, even though the risk premium has not risen despite the persisting tensions in Iran. Furthermore, market participants looking ahead to news regarding Greece, where final negotiations regarding the debt swap of private creditors are due on Thursday.

Oil futures at ICE and NYMEX traded lower on Monday morning, after China had reduced its economic growth forecast (from 8.0% to 7.5%) and the euro zone's service PMI had fallen behind expectations. Selling pressure at oil markets ebbed only after the publication of better-than-anticipated EU retail sales at 11 a.m. The euro advancing in the afternoon provided some additional support. US economic data which were published later in the afternoon added to the slightly bullish sentiment, as did the talks between Barack Obama and Israel's Prime minister Benjamin Netanyahu. The president of the USA assured Israel of his support but also warned of pushing war talks too far. Investors at oil markets have already been pricing in the risk of an armed conflict in the Middle East for weeks, hampering thus a significant correction down at ICE and NYMEX. In the evening, quotations fluctuated on a high level, settling near their intraday highs.

ICE Gasoil contract for March delivery settled at at 1,014.75 dollars on Monday. This was 4.25 dollars above Friday's settlement. With some 31,700 contracts the traded volume was far below average.

The lines of the stochastic indicator have crossed at ICE and NYMEX charts this morning, giving a selling signal to market players. From the merely technical stance, this indicates some profit taking at oil markets and that oil futures may test their supports. If quotations fall below their short-term supports at 122.70 dollars (Brent) and 105.70 dollars (WTI Crude) on the long run, they might approach mid-term supports or even the lows of Feb 02. Technical analysts point at the risk premium, however, that is opposing a change of the current trend and only allows for brief downward reactions.

U.S.

Nymex acces easing. Oil futures traded lower in Asian trading hours and on Globex electronic trading platform this morning. After yesterday evening's highs market participants took some profit in the early morning. The euro which is currently edging lower is reinforcing this tendency. The traded volume is on average. Investors today look ahead to the developments at European stock markets and new impulsions from forex trade. There are no important economic indicators scheduled today. Only the preliminary estimate of the euro zone's GDP in the fourth quarter of 2011 is to be published.

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

Crude oil +0.8; distillates -1.7; gasoline -1.5 million barrels vs previous week

Houston (ex-wharf indications 5-3)

380cst $726
180cst $766
MGO $1042
v Very tight avails for 180 cst

New Orleans (ex-wharf indications 5-3)

380cst $728
180cst $769
MGO $1046

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

Crude is slowing, but not turning yet with WTI -$0.10 Singapore paper is ahead of crude, truning bullish with +$3.00 for 180cst and +$2.45 for 380cst for Mar, and for Apr 180 cst +$3.20 and 380cst +$3.05 with MGO contracts Mar +$1.30 and Apr +$1.32. The cargo market is tracking the bearish start of the weekwith 180cst -$6.23, 380cst -$6.07 and MGO -$1.47.

The Singapore fuel oil markets fell more than $6.0 during the morning yesterday, tracking the weaker crude movement. Market demand was said to be weak dampened by high outright prices. The delivered bunker premiums edged up to around $4.00 above cargo prices. This morning markets are trading slightly down.

High premiums for prompt deliveries.

380 cst $735
180 cst $745
MGO $1000

Fujairah (delivered indications 6-3)

380cst $752
180cst $773
MGO $1055

Avails issue are sustaining the market.

ARA (Amsterdam - Rotterdam - Antwerp)

The ARA started the week on a bearish note, but the current shortage of lsfo is continuing at least until mid this week. Most suppliers will not offer on prompt supplies.

Rotterdam

Indications for delivered bunkers:

380cst : $ 707
(1.0 %) :$ 758
180cst: $ 730
(1.0 %):$ 774
MGO 0.1%S: $1005