IPE Brent rebounds as US cold weather continues, OPEC meets

London (Platts)--12Dec2005

IPE Brent crude futures firmed in London reversing Friday's sharp
sell-off as cold weather continues in the US and OPEC ministers agreed in
informal talks to leave crude output unchanged for the time being. 
     "The market has bounced back this morning with the prospect of another
OPEC meeting in January, at which point cuts might be proposed," one broker at
Man Financial said. Cold weather, which had been a major driver of prices last
week was also set to continue. Temperatures across the US northeast were set
to remain well below average, according to Accuweather.   
     By 1037 London time, the front-month January contract had traded up 56cts
at $57.87/bbl, close to the intra-day high so far of $58.03/bbl. In Kuwait, it
appeared as if OPEC ministers were gearing up to propose a roll over in
current production levels. "The market is steady, so you don't want to disturb
anything that is steady," Nigerian Oil minister Edmund Daukoru said in Kuwait
Sunday. 
     In addition, OPEC's output monitoring committee has agreed to recommend
that the cartel's crude output quotas be left unchanged for the time being,
the OPEC President Sheikh Ahmed Fahed al-Sabah said. Ministers considered
whether to withdraw OPEC's offer for an extra 2-mil b/d which they pledged to
the market in September to cope with the shortages caused by Hurricanes
Katrina and Wilma in August and September. "We may remove it, but leave it as
option whenever there is a need," OPEC president Sheikh Ahmed said.
     Elsewhere, prices appeared to be relatively unaffected by the weekend's
explosion at a major oil depot at Buncefield near Hemel Hempstead in
Hertfordshire. The depot, which is the fifth largest in the UK is a major
supplier of gasoline and jet fuel to petrol stations and airports across
southern England. The facility handles around 2.37-mil mt of petrol and other
products a year. Buncefield is also understood to be a major supplier of jet
fuel to Heathrow airport. "The output from the depot should be met from the
other UK depots," one broker said Monday. 
     Prices also appeared to be unaffected by two reports of bomb attacks in
Athens and Beirut.
     IPE gasoil futures were drifting lower early Monday with the front-month
December contract down $15.50 at $494.75/mt, the lowest level since Dec 1.

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