US cold weather, weak dollar limits IPE Brent losses Tuesday

London (Platts)--13Dec2005

IPE Brent futures in London edged lower Tuesday on profit taking and
mainly shrugged off OPEC's decision in Kuwait City but has received some
support from US colder weather and a weaker US dollar, traders said.
     The front-month January Brent benchmark contract opened 22 cts lower at
$59.22/bbl, last trading  at $59.37/bbl at 1146 GMT, down 7 cts/bbl from
Monday's $59.44/bbl settle.     
     "The forecasts for lower temperatures than expected in the US Northeast
and the weaker dollar will keep the crude values firm," one broker said adding
that the market had shrugged off the latest OPEC decision. 
     OPEC agreed to leave current production limits unchanged for the time
being, deeming them adequate for the first quarter of next 2006, but the
outlook further ahead next year could mean production having to be reined in.
     The meeting agreed to meet again Jan 31 in Vienna to discuss market
developments ahead of the second quarter, when demand for oil traditionally
falls after the northern hemisphere winter. The official communique released
after the talks ended hinted strongly at a possible cut in crude output early
next year to prevent oversupply.  
     Elsewhere, gasoil futures contracts for January delivery traded $8.75/mt
higher at $532.50/mt, as the market lagged late Monday's crude shot-covering
due to the difference in the closing time.
     According to data released Friday by the Commodity Futures Trading
Commission, non-commercials, which are primarily comprised of hedge funds,
added 12,364 crude futures and option contracts as of Dec 6. Non-commercials
were long a total of 53,957 crude futures and options contracts. 
     All of the contracts purchased were in the futures market, indicating
non-commercials were covering short positions, which helped push the market
up. Non-commercials were still short 29,527 crude futures contracts and added
4,391 contracts of unleaded gasoline futures and options contracts, leaving
them long 19,922 lots. Non-commercials bought back 4,849 contracts of heating
oil futures and options, leaving them short 3,874 lots.

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