---

Oil prices have gained ground in the morning breaching first resistance lines at ICE. Stronger equities and a softer dollar have provided some impetus. Moreover investors hope that the FED will announce more monetary stimulus.

Oil futures have traded slightly lower on Monday morning, trading sideways in a narrow range and testing first supports. As there was little fundamental news these supports proved strong however. Market participants already focused on Ben Bernanke's speech in front of the Congress on Tuesday and Wednesday. Some investors hope that he might give some hints regarding new expansive measures. Yesterday afternoon's US economic data came out mixed and did not give any directive cues. In the course of the evening the slightly bullish sentiment prevailed, so oil futures have breached their first resistance lines. Reports saying that the US navy has started to shell a boat in the Persian Gulf has briefly provided some impetus but this ebbed, when it became clear that there was no Iranian ship involved.

ICE Gasoil contract for August delivery settled at 889.50 dollars on Monday. This was 9.75 dollars above Friday's settlement. With some 50,100 contracts the traded volume was about on average.

The U.A.E. started operating “Adcop” a new oil pipeline that bypasses the Strait of Hormuz started its exports Sunday, and the first cargo is heading to a refinery in Pakistan. The pipeline, which can transport 1.5 million barrels a day of crude, is expected to have a regular flow of oil by August and will enable Abu Dhabi, the largest United Arab Emirates sheikdom, to export as much as 70% of its crude from Fujairah, located outside the Persian Gulf on the Gulf of Oman, where tankers will be able to pick up the oil instead of sailing into the Persian Gulf via the Strait of Hormuz.

The stochastic indicator is still slightly bullish but gradually approaches the overbought zone, with the lines of the indicator continuing to converge, see also technical analysis. Technically there are not many changes compared to yesterday. The stochastic indicator is fading into the background, however, as speculations regarding further expansive measures of monetary policy predominate. Technical analysts therefore rather assess the situation as neutral.

U.S.

Nymex access gaining: Oil futures remained steady in Asian trading and on Globex electronic trading platform this morning profiting from the stronger euro and equities. The traded volume is on average. Market players eye equities and forex markets today as well as economic indicators. Focus will be on the comments of Fed president Ben Bernanke.

Survey of US Petroleum inventories due out tonight at 22:30(API) and Wednesday at 16:30(DOE)
Crude oil +0.5; distillates +1.1; gasoline +1.1 million barrels vs previous week

Houston (ex-wharf indications 16-7)

380cst $598
180cst $623
MGO $940

New Orleans (ex-wharf indications 16-7)

380cst $603
180cst $628
MGO $970

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

Crude is gaining bullish momentum with WTI +$2.27. Singapore paper is also firming with +$14.40 for 180cst and +$13.50 for 380cst for Aug, and for Sep 180 cst +$14.40 and 380cst +$13.50 with MGO contracts Aug +$1.98 and Sep +$1.98. The cargo market more cautious with 180cst +$0.37, 380cst +$1.84 and MGO +$0.40.

The Singapore fuel oil market prices were up by $0.5 - 2.00/mt during the Platts window yesterday. The Asian Fuel Oil crack remains weak as the market is affected by a thin demand. The delivered bunker premium was around $8.0/mt above cargo prices yesterday. Bunker fuel swaps finished the day higher by approx. $9.25/mt. Markets are trading slightly down this morning.

High premiums for prompt deliveries.

380 cst $600
180 cst $613
MGO $860

Fujairah (delivered indications 16-7)

380cst $620
180cst $635
MGO $1010

ARA (Amsterdam - Rotterdam - Antwerp)

Both hsfo and lsfo are still bullish, tracking Brent. Continuing loading delays, cutter stock shortages and arbitrage loadings reported. High premiums are charged for prompt enquiries.

Rotterdam

Indications for delivered bunkers:

380cst : $ 603
(1.0 %) :$ 651
180cst: $ 649
(1.0 %):$ 692
MGO 0.1%S: $901