IPE Brent falls on foiled terrorist attack, demand remains robust

London (Platts)--10Aug2006

Crude oil futures in London fell sharply in the aftermath of a foiled
terrorist attack to blow up airliners flying between the UK and the United
States, but the impact on oil demand was unlikely to be felt, analysts said.
The front-month September Brent futures contract was trading down 70
cents at $76.59/barrel, close to the intra-day low of $76.44/barrel. The fall
in prices followed on from sell-offs into the close Wednesday where the
front-month contract settled at $77.28/barrel having been within 20 cents of
the all time high earlier in the day.
"There is unlikely to be much of an impact on oil demand, it is simply
too early to tell," Kevin Norrish, oil analyst with Barclays Capital said.
In a recent research note, Barclays Capital raised their price forecasts
for WTI for the balance of 2006 to $78.60/barrel and therefore pushing the
yearly average for 2007 higher to $76.60/barrel. The bank is also forecasting
an oil price of $93/barrel for 2015.
Oil markets were rocked Wednesday by the latest US Department of Energy
stock report which showed that gasoline inventories fell much more sharply
than expected at 3.2 million barrels with crude stocks also falling by 1.1
million barrels, however this was in line with Platts estimates.
Crude oil prices in London came within 20 cents of an all-time high level
Wednesday with September crude futures trading at $78.43/barrel. Analysts said
that the most concerning fact was the refinery runs number which lagged year
ago levels and would likely result in higher prices heading into the fourth
quarter of the year when oil demand typically peaks.
--Paul Wightman, paul_wightman@platts.com

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