IPE Brent futures gain ground on cold weather forecasts

London (Platts)--21Nov2005

IPE Brent futures in London rallied on Monday, finding support from a
winter storm bearing down on the US Midwest and Northeast, though some
brokers doubted longer-term strength. 
     The Brent benchmark crude contract opened at $55.25/bbl and it was last
trading at $55.68/bbl at 1015 GMT, up 80 cts from Thursday's $54.88/bbl
settle.
     The weather is expected to be extremely cold over a large part of the
US east of the Mississippi River. The storm was poised to bring "the
coldest weather of the season" over the Midwest, Great Lakes, Ohio Valley and
into the Northeast, according to AccuWeather website.
     "The funds were selling quite actively last week and probably will keep
on as there are good selling opportunities at the moment," said one broker. 
     Non-commercials, which are primarily comprised of hedge funds, liquidated
4,754 crude futures and options contracts, according to data released Friday
by the Commodity Futures Trading Commission. Non-commercials were still long
19,014 contracts of crude futures and options contracts.
     However, non-commercials were short 56,168 contracts of futures, having
added 8,352 contracts of shorts during the reporting period and contributing
to the continued sell-off in the crude market which sent prices below $57/bbl.
     Non-commercials liquidated 1,215 contracts of unleaded gasoline futures
and options, leaving them long 18,574 lots. Non-commercials sold 167 contracts
of heating oil futures and options, leaving them short 11,198 lots.
     Commercials continue to hold a long position in the futures market,
having added contracts as prices moved lower and suggesting the market may be
in the process of putting in a bottom. 
     Elsewhere, the front-month December gasoil contract fell, changing hands
at $523.75/mt, up $14.25 from Tuesday's $509.50/mt settle.

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