---

After yesterday's losses oil futures have moved sideways during morning trade. Market sentiment has been influenced by positive Chinese economic data and Moody's changing Germany's outlook to negative. Thus oil futures oscillated between their first supports and their first resistance lines. The ICE G.Oil has just tested its first support. Today's economic indicators might have some impact on oil prices. Investors will closely eye Ben Bernanke's speech later in the afternoon, that may provide further cues as to the Fed's future measures of monetary policy.

The bearish technical constellation still prompted investors to take some profit at oil markets in London and New York on Monday morning and so oil futures have already breached first supports until noon. In the course of the day the RSI crossed the 70%-line providing another selling signal and increasing technical selling pressure. While there were no groundbreaking news regarding Iran, investors focused on the negative news from the euro zone. Spain's bond yields last soared above 7% - a record mark since the currency's inception and a level that may force the country to seize the EFSF soon. Moreover, bailout efforts regarding Greece may have been in vain as rumour has it that the IMF considers to stop providing the country with more credits and the German government also wants to abandon more credits that would be necessary for Greece to suspend the dates of payment. Along with the weak euro and retreating equities oil futures dropped quickly, so at its lowest the Brent lost some 4.2% compared to its price at the opening.

ICE Gasoil contract for August delivery settled at 894.75 dollars on Monday. This was 24.25 dollars below Friday's settlement. With some 70,800 contracts the traded volume was above average.

The stochastic indicator remains bearish this morning whereas the RSI has given another selling signal at ICE and NYMEX, Given Friday's and Monday's decline in prices, markets are not as overbought as a few days ago but technical analysts still assess the situation as bearish, given the selling signals for Brent, G.Oil and WTI.

U.S.

Nymex access losing: Oil futures have edged higher in Asian trading and on Globex electronic trading platform this morning after quotations had consolidated near their yesterday's lows last night. The HSBC's PMI of China's manufacturing sector has slightly improved in July giving oil futures a fillip. The traded volume is above average. Market participants now eye more news regarding the conflicts in the Middle East, equities and forex markets and the economic indicators today.

Survey of US Petroleum inventories due out tonight at 22:30(API) and Wednesday at 16:30(DOE)

Crude oil -0.2; distillates +0.6; gasoline +0.1 million barrels vs previous week

Houston (ex-wharf indications 23-7)

380cst $610
180cst $641
MGO $970

New Orleans (ex-wharf indications 23-7)

380cst $613
180cst $644
MGO $975

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

Crude is up only slightly after Yesterday's hefty losses with WTI +$0.14. Singapore paper is mirroring crude with +$0.40 for 180cst and +$1.20 for 380cst for Aug, and for Sep 180 cst +$0.65 and 380cst +$1.45 with MGO contracts Aug +$0.05 and Sep +$0.07. The cargo market is responding to Yesterday's bearishness with 180cst -$22.98, 380cst -$22.05 and MGO -$3.32.

The Singapore fuel oil market prices erased last week’s gain, shedding more than -$22.0 during the morning Platts window. Market remained firm as cargo premium was seen around $3.5. The delivered bunker premiums were at app. $7.25 above cargo prices yesterday. This morning markets are trading flat.

High premiums for prompt deliveries.

380 cst $615
180 cst $625
MGO $890

ARA (Amsterdam - Rotterdam - Antwerp)

HSFO and LSFO levels eased on the slipping Euro and Greek/Spanish worries. Continuing loading delays and cutter stock shortages result in high premiums for prompt suppliers however, if any avails at al. High premiums are charged for prompt enquiries.

Rotterdam

Indications for delivered bunkers:

380cst : $ 597
(1.0 %) :$ 642
180cst: $ 622
(1.0 %):$ 685
MGO 0.1%S: $888