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WTI shook off early weakness but still lost 13 cents to trade below $97 a barrel, while Brent crude for May delivery slid 70 cents to $110.38 a barrel. U.S. gasoline futures posted the biggest percentage drop in the oil futures complex, pushing below the 50-day moving average of $3.0477 a gallon, a technical level closely monitored by chart watching traders and analysts.

The oil market in London and New York had already re-opened on Monday but many traders had still been on their Easter vacation and thus, the traded volume was rather low. Although transactions increased again yesterday, they clearly remained below average. Market players were rather cautious in early trading, taking some profits after the late price rally Monday night. When the European market opened, oil prices started to trade up, breaching first resistances. Despite mixed data on the euro zone’s economic performance, the Cyprus deal increased investors’ risk appetite and supported financial markets. At the opening of U.S. trading, market volatility noticeably increased in the afternoon. WTI’s and G.Oil’s strong resistances at 97.30 USD and 935.00 USD, respectively, favoured profit-taking from long positions. Adding to this was the weak euro and the slightly bearish technical constellation but the better-than-expected economic data out of the USA and the price jump at the stock market limited downward potential at the oil market. Due to the shutdown of the Pegasus pipeline in the USA, spread bets increased and the differential between WTI and Brent consolidated at around 13.60 USD last night. Merely NYMEX gasoline stayed in the red because of the expected rise in refinery runs. The other futures largely held steady at their opening level.

ICE Gasoil contract for April delivery settled at 929.50 USD on Tuesday. This was 10.50 USD above Monday's settlement. With some 39,500 deals the traded volume was on average.

An explosion hit Libya’s Zueitina Oil Co.’s crude and condensate pipelines yesterday at 10 p.m., state-run National Oil Corp. said on its website, citing company official Abul Qasim Shanger. The company is investigating the incident and starting repairs, without saying whether operations were disrupted. There were no casualties.

Two recent oil pipeline spills have prompted new criticism from opponents of the proposed Keystone XL project, while raising more questions about whether the federal government is adequately monitoring the nation's vast labyrinth of pipelines. An Exxon Mobil pipeline ruptured in central Arkansas on Friday, leaving a sheen of oil on nearby streets and causing the evacuation of 22 homes in the small town of Mayflower. Exxon Mobil said its Pegasus Line, which runs from Patoka, Ill., to Nederland, Tex., was carrying heavy crude from western Canada when the spill occurred. On Tuesday, Attorney General Dustin McDaniel of Arkansas announced that he was opening an investigation into the spill, and he asked Exxon to preserve all documents related to the accident. Opponents of the Keystone XL pipeline, which would also move heavy Canadian crude, leapt on the Exxon spill, reiterating their contention that crude drawn from Canada's tar sands region is too risky to transport and especially vexing to clean up.

The Stochastic still is rather bearish after a selling signal was triggered yesterday. The RSI failed to breach the 70%-line top-down and has moved into the overbought zone again. As the Stochastic’s selling signal dates back to yesterday and there are no fresh signals at the RSI, we consider the technical constellation neutral to bearish this morning.

U.S.

Nymex neutral: The draw in product stocks as reported by the API last night had a supporting effect NYMEX Heating Oil and RBOB Gasoline. However, it did not last and has been considered in pricing by now. The traded volume at NYMEX is about average for this time of day. Investors now closely watch the performance of European markets and wait for new cues from forex trading as well as some economic indicators on the agenda today. They will also focus on the data on US oil stockpiles from the DOE.

Survey: Crude oil +1.9; distillates -0.4; gaoline -0.3 million barrels vs previous week
API: Crude oil +4.7; distillates -1.9; gaoline -5.0 million barrels vs previous week
DOE: due out tonight

Houston (ex-wharf indications 02/04 )
380cst $626
180cst $676
MGO $1024

New Orleans (ex-wharf indications 02-04)
380cst $627
180cst $657
MGO $1026

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

The Singapore fuel oil market rose more than $6.5 during the morning Platts window yesterday on stronger previous crude close. The intermonth spreads softened on weaker demand seen from the Chinese buyers while incoming products are arriving steadily. The delivered bunker premiums were between $7.5- 8.25 above cargo prices. This morning the markets are trading slightly down.

WTI is waiting for economic indicators, so stayed rather neutral -$0.08. Paper for Apr is dropping with 180cst -$6.00 and for 380cst -$5.88, and May contracts with 180cst -$5.75, 380st -$3.80. The cargo market is bullish with 180cst +$6.66, and 380cst +$7.37 and MGO +$1.60.

High premiums for prompt deliveries.
380 cst $635
180 cst $637
MGO $920

Fujairah (delivered indications 03-04)

380cst $643
180cst $687
MGO $1035

ARA (Amsterdam - Rotterdam - Antwerp)

Even due to long waiting lines at some refineries and storages, no problems for prompt enquiries are to be expected.

Indications for delivered bunkers:
380cst : $ 609
(1.0 %) :$ 627
180cst: $ 639
(1.0 %):$ 657
MGO 0.1%S: $ 900