"It's a bit quiet right now. People are taking stock after this morning's rise. It's not clear if the physical market can support these increases," one trader said.

February gas oil swaps was last quoted $14.50/$14.60 per barrel, up from Thursday's $14.25/$14.35, brokers said. They said the market traded in the morning at $14.65 and $14.60, both Times bought by a local trader.

Traders said the market caution was due a lack of strong regional enduser demand where India's requirement to March has been factored, with China not expected in the spot to well after mid-February.

Chinese diesel imports for 1998 fell by 57 per cent from ayear ago to 3.1 million tonnes with December imports at a paltry 40,435 tonnes, according to custom figures.

The strong prompt physical support, however, has widened the time spread between frontmonths with February/March spread last quoted at 20/35 cents compared with 15/25 cents on Thursday.

In the gas oil physical market on Thursday a local trader had bid up the early February loading date cargoes to $14.80 and bought a mid-February cargo at $14.50, which created a backwardation value of about 35 cents for just 15 days.

The deal was well below offers at $15.10 for similar mid-February cargoes on Thursday.

Fuel oil swaps also rose in tandem with crude where reports of troop movements in Iraq led to a jump in prices. Overnight March Brent in London closed 47 cents up at $10.98 and last traded up 29 cents on Simex at $11.27 by 0832 GMT. February fuel oil paper was last quoted a dollar more than Thursday at $68.00/$68.75.