•IPE Brent fell slightly in Early Tuesday
trading, as the market took a little profit following the surge in prices
prompted by Tropical Storm Rita Monday. At 0926 GMT, the October Brent futures
contract was down $1 at $64.68/bbl.
•"Our eyes and ears are locked
on what Rita is doing and the market will react violently to any adjustments to
the predictions of its path," one trader said.
•The approach of Rita
to the Gulf and fears of further oil market disruptions had completely diverted
traders' attentions away from Vienna, where OPEC ministers are meeting to
consider a proposal to offer 2-mil b/d of spare capacity to the market. "We're
just not even looking at that at the moment," said one Brent broker.
•Tropical storm Rita had almost
reached Hurricane strength at 0300 GMT as it continued to move on a track to put
it in the southern Gulf of Mexico by early Wednesday, according to the latest
update from the US National Hurricane Center.
•"Despite the huge movements, volumes of
trades are not that great," one London broker said, "We have seen sellers become
frightened on the swaps and now that is moving over to the futures market."
•"I do not believe the that
movements like yesterday are sustainable, but I cannot see the market come down
hard. There is panic from those who are short and the usual sellers have lost
the nerve to sell. Buying on the market dips would be a very good policy to
take," one trader said.
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