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Brent crude oil climbed towards $111 per barrel on Monday as fighting in Beirut and Gaza raised fears for the security of fuel supplies from the Middle East, helping stem a four-day decline in prices. Brent lost 4% last week on global economic uncertainty. But growing violence in parts of the Middle East, which supplies a third of the world's oil, has helped counter concerns over weaker fuel demand.

After the price increase on Thursday evening oil futures traded slightly higher on Friday morning. Gunfights in the region near the border between Turkey and Syria made oil futures test their resistance lines. When the WTI crude breached the 92.55 dollars bar in the early afternoon, further technical selling orders were triggered. In the course of the evening sentiment changed traders began to cut their long positions and to take some profit ahead of the weekend. This was triggered by several factors: unconvincing economic data published at the end of the week, the imminent re-commissioning of the biggest North Sea oil field Buzzard and of the Keystone pipeline (Canada/USA) at the weekend, and stock markets that marked losses as the EU's summit rather disappointed investors. Technical selling pressure at oil markets increased when futures breached their supports. Moreover market players reduced their riskier assets ahead of the weekend, particularly because the WTI's frontmonth contract (November) expires this Monday. Only near the psychological support at 90.00 dollars were the WTI crude's losses limited. In early trade on Monday morning there was a slight counter-reaction that had on the one hand been caused by some technical profit taking from short positions but also by the delay in the re-commissioning of the Keystone pipeline in the USA and the Buzzard oil field in the North Sea.

ICE Gasoil contract for November delivery settled at 996.50 dollars on Friday. This was ±0.00 dollars compared to Thursday's settlement. With some 61,100 deals the traded volume was on average.

At the WTI charts the stochastic indicator is clearly bearish this morning, whereas the lines of the indicator at ICE already converge again. The merely technical situation thus remains slightly bearish, even though Friday's massive profit taking favour a counter-reaction this morning. Therefore, according to analysts, oil futures' downward potential is limited and prices are likely to consolidate above the intraday-lows they have marked so far.

U.S.

Nymex access bullish: Oil prices have edged slightly higher in East-Asia and Globex electronic trading this morning, as the Nikkei 225 and the euro marked some gains and Friday's profit taking favoured an upward correction in the early morning. The traded volume is above average. Market players now look ahead to the performance of stock and forex markets as well as today's economic indicators.

Houston (ex-wharf indications 19-10)

380cst $625
180cst $678
MGO $1050

New Orleans (ex-wharf indications 19-10)

380cst $633
180cst $683
MGO $1055

Singapore (correct as per 14:30hrs LT-delivered indications)

Crude is bullish with WTI -$1.67. Singapore paper is decreased with -$7.00 for 180cst and -$6.80 for 380cst for Oct, and for Nov 180 cst -$6.80 and 380cst -$7.10 with MGO contracts Oct -$2.44 and Nov -$2.42 The cargo market is stable with 180 cst +$1.52 380cst +$1.23 and MGO -$0.79.

The Singapore fuel oil markets rose app. $1.0 during the morning window last Friday. The latest Singapore residual inventory reported a draw of 0.28 mbbl to 19.32 mbbl. The delivered bunker premiums weakened to around $3.75 above cargo prices last Friday. This morning the markets are trading slightly higher.

380 cst $637
180 cst $648
MGO $938

ARA (Amsterdam - Rotterdam - Antwerp)

High and low sulphur fuel oil loadings in Rotterdam remained hindered by ongoing operational delays at loading installations. The nearest bunker hub of Antwerp reported good operations and good product availability.

Rotterdam

Indications for delivered bunkers:

380cst : $ 615
(1.0 %) :$ 645
180cst: $ 647
(1.0 %):$ 677
MGO 0.1%S: $975