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WTI rebounded from its lowest closing level in a week amid speculation the start of a new pipeline will deplete inventories at Cushing. Oil prices advanced as much as 0.5 percent in New York. TransCanada Corp.’s Keystone XL link, which begin delivering crude from Cushing to Texas last month, will reduce “bloated” stockpiles at the storage hub to as little as 20 million barrels by April. That would be about half current levels, based on Energy Department data. WTI declined the most in almost a month yesterday as a U.S. manufacturing gauge dropped more than forecast.

OPEC: In a press conference Libya’s Prime Minister Ali Zeidan said that he had asked the minister of defense to order the chief of staff to move towards the blocked oil ports in the East of the country. Military forces have prepared for this order over the past few weeks, Mr Zeidan added. Since negotiations haven't brought any breakthrough, even after intermediaries have taken part in them, there seem to be no more diplomatic means left for the Libyan government. The militia's blockades at oil ports in the east of Libya are now to be ended by the army.

Against the backdrop of the slightly bearish fundamental and technical constellation, oil futures at ICE started this week showing a softer tendency. After having briefly tested their upward potential in early morning trade oil prices bounced from their first resistances, successively losing ground and breaching several short-term supports. When oil futures had fallen below their uptrends on Friday, new downward potential had been generated and so, with Chinese and US indicators having missed expectations, the technical as well as the fundamental factors favored another decline yesterday. In late evening trade, NYMEX Heating Oil bounced back up as market players expected the data on US oil inventories to renewedly show a massive draw in distillate stockpiles. This upward move also dragged the rest of ICE and NYMEX futures higher. Therefore, losses were limited. The spread between Brent and WTI renewedly narrowed yesterday as the start up of the southern section of the Keystone pipeline lead investors to expect that Cushing crude oil stocks have shrunk.

ICE Gasoil contract for February delivery settled at 903.00 USD on Monday. This was -14.00 USD below Friday's settlement. With some 39,500 deals, the traded volume of the front month was below average.

The selling signal of the stochastic indicator at the ICE charts was generated on Friday already, that at the WTI chart yesterday morning. Thus, the indicator doesn't give any new cues this morning but is still slightly bearish as - with oil futures retreating - its lines have continued to decline. Technical selling pressure has waned however, given Friday's and Monday's downward move. Market participants will try to find out today, whether the downward correction is already finished or whether there is more downside. The question if oil futures fall below yesterday's lows will be decisive in this regard. If they do so sustainably, ICE futures might test this year's lows at 105.00 dollars Brent, or 896.50 dollars Gasoil respectively. We therefore still assess the technical constellation as neutral to bearish this morning.

U.S.

Nymex neutral: Oil futures traded hardly changed within a relatively tight range this morning as there were no fresh cues. The traded volume at NYMEX is below average for this time of day. Traders are now monitoring the development at stock markets looking ahead to new cues from forex markets. They will also keep eying the situation in the geopolitical hot spots, particularly Libya. Moreover, they are waiting for today's economic data.

Forecasts: Crude oil +2.3; Distillates -2.5; Gasoline +1.4 million barrels vs previous week.

Houston (ex-wharf indications 4-2)
380cst $594
180cst $675
MGO $1023

New Orleans (ex-wharf indications 4-2)
380cst $602
180cst $661
MGO $1009

Singapore (delivered indications 4-2)

WTI is cooling slightly, dropping with -$0.40. Singapore paper remains on its bearish track with -$6.00 for 180cst and -$2.50 for 380cst for Feb, and for Mar 180 cst -$2.75 and 380cst -$1.75 with MGO contracts also bearish Feb -$0.30 and Mar -$0.33. The cargo market is bearish with 180 cst -$8.79, 380cst -6.37 and MGO -1.09.

Fujairah (delivered indications 4-2)

380cst0 $617
180cst $645
MGO $984

ARA (Amsterdam - Rotterdam - Antwerp)

Indications for delivered bunkers:
380cst : $571
(1.0 %) : $611
180cst: $601
MGO 0.1%S: $ 876