---

During morning trade oil futures kept track of yesterday evening's gains testing their first resistance lines. The IEA's monthly energy report forecasts a decline of the output of Iranian and non-OPEC crude but also expects supply and demand to remain balanced.

After oil futures saw some downward correction at the beginning of this week, they consolidated in London and New York on Wednesday morning. Market participants reduced some of their riskier assets and were waiting for the DOE's oil inventories data. The massive builds in crude oil stocks in the past few weeks and the API's forecast, published Tuesday evening, have lead investors to expect that the DOE's data would come out as bearish. Futures at ICE proved to be rather volatile. The expiry of the G.Oil contracts for April delivery (Thursday) and of the Brent contracts for May delivery (Friday) added to this volatility. Immediately after the publication of the DOE's data oil prices sharply rose. The builds in crude oil stocks were not sufficient for a clear bearish impuls, whereas the draws in product stocks pushed quotations higher. Other factors like the gains at stock markets and the advancing euro increasingly supported prices in the course of the evening.

ICE Gasoil contract for April delivery settled at at 999.00 dollars on Wednesday. This was +5.50 dollars above Tuesday's settlement. With some 29,000 contracts the traded volume was far below average.

OPEC: According to the IEA's report, Iran's crude output has already dropped by 10% due to the implemented sanctions. The OPEC's over-production is more than enough, however, to balance these cuts. Oil supply is to have outweighed demand by more than 1 million barrels per day, so global reserves have increased by 1.2 mbpd. The report also indicates sharply declining reserve capacities, however. They are on the lowest level since 2008. In all, the report was in line with investors' expectations.

The stochastic indicator is bullish at WTI charts this morning. As its lines have crossed, the indicator is giving a buying signal. For the Brent and the G.Oil, the indicator still shows no impulsion, however. Thus we still asses the technical situation as neutral this morning. Market participants are still waiting for decisive impulsions. The downward correction in the past few days seems to have stopped, however. Technical analysts therefore expect prices to consolidate. Investors are likely to turn to the more actively traded contracts today as the current front months for Gasoil (April) and Brent (May) are going to expire today at 1 p.m. resp. tomorrow evening.

U.S.

Nymex acces gaining. Oil futures have climbed in Asian trading and on Globex electronic trading platform this morning. Market players remained cautious however, taking some profit after last nights price rally. Still, oil futures have traded in a rather narrow range in the early morning. The traded volume has been far below average. Market participants are eyeing stock and forex markets, European resp. US economic indicators and the IEA's monthly energy report.

API's: Crude oil +6.6; distillates -0.5; gasoline +1.2 million barrels vs previous week. Refinery utilization -2.2%
DOE's; Crude oil +2.8; distillates -4.0; gasoline -4.3 million barresl vs previous week. Refinery utilization -1.9%
Forecasts: Crude oil +1.7; distillates -0.6; gasoline -0.6 million barrels vs previous week

Houston (ex-wharf indications 12-4)
380cst $713
180cst $750
MGO $1025

Very tight avails for 180 cst

New Orleans (ex-wharf indications 12-4)

380cst $710
180cst $747
MGO $1052

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

Crude is surging with WTI +$1.77 Singapore paper is starting to turn again as well with -$5.75 for 180cst and +$6.75 for 380cst for Apr, and for May 180 cst +$5.75 and 380cst +$6.75 with MGO contracts Apr +$1.23 and May +$1.25. The cargo market is not yet reacting, losing with 180cst -$10.68, 380cst -$10.21 and MGO -$2.01.

The Singapore fuel oil markets fell more than -$10.0 yesterday morning, tracking the weaker crude movement. The delivered bunker premiums were around $6.75 above cargo prices on more balanced fundamentals and higher crude prices movements. This morning markets are trading higher.

High premiums for prompt deliveries.

380 cst $721
180 cst $730
MGO $1000

ARA (Amsterdam - Rotterdam - Antwerp)

The ARA markets ease somewhat, but loading congestion remains an issue. Two fixtures have been reported, which will eat into the avails of hsfo. with loading congestion lurking. The Antwerp avails are still very tight. A contango structure is seen for April-May in Rotterdam, suggesting increasing prices.

Rotterdam

Indications for delivered bunkers:

380cst : $ 695
(1.0 %) :$ 765
180cst: $ 722
(1.0 %):$ 784
MGO 0.1%S: $998