ICE Brent futures inch higher on Iran deadline, technical buying

London (Platts)--22Sep2006

ICE Brent crude futures continue to creep upwards Friday, extending the
gains made on Thursday and clawing back some of the sharp losses seen earlier
in the week.
World powers gave Iran a new early October deadline to halt uranium
enrichment on Wednesday, helping provide some support to oil prices, although
the news has been received cautiously by the oil market as previous deadlines
have come and gone with little impact, one London broker said.
"This little rally is really a response to WTI which had quite a bullish
settle last night so Brent is playing catch up a little," said the broker.
"There's no fresh news to sustain this though and the market is still
dominated by technical features and I think a lot of the gain this morning is
your typical Friday covering ahead of the weekend."
At 1123 London time (1023 GMT) November Brent was trading 21 cents higher
at $61.55/barrel with the spreads largely unchanged and volumes low so far.
ICE WTI november was trading 36 cents higher at $61.95/barrel.
The market is also in need of a "breather," added the broker, following a
turbulant week that has seen an intra-week high of $64.86/barrel on Tuesday,
following news of delays to the BP Thunder Horse oil field in the US Gulf, and
an intra-week low of $60.34/barrel on Thursday as US natural gas inventory
builds brought the market lower.
The largest obstacle barring a recovery in prices remains the oversupply
of crude and products on both sides of the Atlantic, said one trader.
US oil inventory levels need to be eroded further, particularly on the
products side with winter fuel proving to be well stocked, Barclays Capital
said in its latest weekly report.
Any fall in product stocks such as heating oil in the US would support a
recovery in the crude complex, Barclays said.
--Jonathan Davies, jonathan_davies@platts.com

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