IPE Brent up ahead of early US gasoline draw estimates

London (Platts)--2May2006

IPE Brent futures in London on Tuesday were up slightly, continuing
Monday's strong rise, as the market looks ahead to Wednesday's US inventory
data where early projections are for draws in gasoline. The small rise also
comes ahead of a meeting in Paris Tuesday between representatives of UN
Security Council members called to discuss the impasse over Iran's pursuit of
nuclear technology.

At 1114 London time (1014 GMT) the front-month June IPE Brent contract
was trading at $74.29/barrel, up 40cts from overnight levels.
"I think there is a draw in the US gasoline stock data estimates that is
contributing to the rise. Currently the draw estimate is at 1.9 million
barrels," a broker said.

On Monday, the contract gained $1.93/barrel as hedge funds re-entered the
market, traders said. It rose sharply in line with the hikes on the New York
Mercantile Exchange amid new long positions established by strong fund-buying.

Other factors keeping the market supported is due to renewed supply
issues in Europe. Operations at Italian ERG Group's 160,000 b/d Isab North
refinery in Sicily remain halted after the plant was hit by a fire Sunday. ERG
said it was investigating the cause of the fire and inspecting the pipelines
struck by the fire to determine how long it will take to have operations
restarted.

Later Tuesday in Paris, high-ranking officials from the UN Security
Council's five permanent members will meet to formulate a common position on
how to deal with Iran's development of nuclear technology.
The meeting, at political director-level, was the first for
representatives of Britain, China, France, Russia and the United States since
the IAEA reported to the UN Security Council last Friday that Iran was
violating a UN order to halt uranium enrichment, AFP reported.

However, Iranian Foreign Minister Manuchehr Mottaki expressed confidence
that Russia and China would prevent any sanctions being imposed. "These two
countries have officially and in diplomatic talks told us they are against
sanctions and military attacks," Mottaki told the hardline Tehran daily
Kayhan.

In other news, Bolivia is set to nationalize their oil and gas industry
according to their President Evo Morales on Monday. Morales, a left-wing
president, had said that foreign energy companies would have to agree new
contracts with the state-run oil firm, Yacimientos Petroliferos Fiscales
Bolivianos (YPFB), within 180 days. Bolivia has the second-biggest gas
reserves in South America after Venezuela, with an estimated 54 trillion cubic
feet.

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