Crude down more than $1 on selloff in gasoline

Crude down more than $1 on selloff in gasoline

New York (Platts)--28Jul2006

Crude benchmarks were sharply lower at midday Friday as the market
ignored ongoing geopolitical and supply problems and instead moved in concert
with a steep decline in gasoline futures.

NYMEX floor sources said gasoline traders looked to exit positions ahead
of the expiration on Monday of the August products contracts.

Just after noon EDT, NYMEX September crude was trading $1.44 lower at
$73.10/barrel. IPE Brent was also $1.44 lower at $73.57/barrel.

"The petroleum market is holding within its recent range, but looking a
little tired heading into the weekend and leaning on support," Tim Evans,
energy analyst at CitiGroup, said in a report.

August gasoline on NYMEX was trading at $2.2250/gal, down more than 7.10
cents; gasoline for September delivery -- when demand typically begins to fade
after the summer driving season -- was off almost 8 cents

Heating oil was 3.46 cents to the downside at $1.9450/gal.

The crude market, at least Friday, appeared unconcerned by the ongoing
supply woes from OPEC member Nigeria, where Royal Dutch/Shell earlier this
week declared a force majeure on Bonny Light exports after a pipeline rupture
forced the shut-in of 180,000 b/d of production. Shell on Thursday said output
could resume in a couple of weeks.

The major also said it did not expect a significant restoration of its
Forcados and EA production in Nigeria, halted since February, before the end
of the year. Some 455,000 b/d of Nigerian output was already offline prior to
Shell's pipeline woes this week.

On the geopolitical scene, UK Prime Minister Tony Blair arrived in
Washington Friday for talks with President George W. Bush on the crisis
between Israel and Hezbollah. Blair wants a UN resolution to be acted on as
early as next that would bring an end to the more than two weeks of fighting.

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