Crude futures hit one-month high ahead of US inventory data

London (Platts)--29Nov2006

Global crude futures hit a one-month highs Wednesday ahead of the US
inventory report as fund buying, cold weather forecasts in the US and a weak
dollar all added support to the market.
At 1109 GMT the January ICE Brent futures contract traded at
$61.75/barrel, up 54 cents from the overnight settle. The ICE WTI and NYMEX
WTI futures contracts for January moved 40 cents higher to $61.39/barrel.
"The bullish sentiment is continuing and this morning we've mainly seen
fund buying as some of their triggers kicked in when we reached the
$61.50/barrel level on January ICE Brent," a London-based broker said.
Market players also expected prices to extend their gains prior to the US
inventory report as hedge funds continue to add longs to their position buy
buying at regular intervals throughout the morning, traders said.
"I think we may near the $62.25 level even before the stats come out.
There is no reason for the funds to stop buying and that may continue too a
resistance level of around $62.25/barrel," a broker said
At 1530 GMT the Energy Information Administration and American Petroleum
Institute will release their latest set of crude and product stock data.
Analysts polled by Platts on Tuesday are expecting a 300,000-barrel decline
in commercial crude stocks.
An expected rise in refinery utilization to 87.6% from 87.1% a week ago
and a dip in imports following an unexpectedly large rise reported last week
should lead to a drawdown in inventories, according to analysts.
Total gasoline inventories were expected to rise 500,000 barrels
according to the polled analysts whilst a 700,000 barrel build in distillate
stocks, is also expected.
Crude traders said the data released later Wednesday may provide a
surprise build in crude stocks, similar to last week, which then dampened the
bullish tone that had been set at the start of last week.
"The massive and unexpected build in crude stocks last week shocked
everyone and all momentum was lost. With the expectations of small draws and
builds in crude and products I'm sure there will be one number that will be a
surprise," a trader said.
--Jean-Luc Amos, jean-luc_amos@platts.com

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