IPE Brent futures below $60/bbl for first time in two months

London (Platts)--6Oct2005

Brent crude futures extended this week's decline on London's
International Petroleum Exchange on Thursday, trading below $60/bbl for the
first time in two months. 
     At 1043 GMT the front-month November IPE Brent crude futures contract was
pegged at $59.38/bbl, 74cts down from the overnight settle, in line with the
light, sweet US benchmark, NYMEX West Texas Intermediate.
     Despite US Department of Energy stock data initially considered bullish
Wednesday, the downward slide in crude futures either side of the Atlantic
will continue, traders said, as the market seems still to be product-led.
     "This current downward trend I can see continuing down to the $57.50/bbl
mark," one London broker said. "We could see that level very soon, maybe even
by the end of this week."
     US crude runs dropped heavily to 11.715 mil b/d, the lowest level for 18
years, after Hurricanes Katrina and Rita put many Gulf Coast refineries out of
action. The effects were seen in the US weekly inventory report, where
distillate stocks were down 5.6-mil bbl and gasoline stocks off 4.3-mil bbl.  
     Market sentiment is bearish despite the large draws in product stocks.
Crude draws in the US statistics were smaller than expected and the Commission
of Traders report has also shown a record high number of contracts for
non-commercial shorts for crude.

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