Crude futures hit two-month high, extending four-day rally

London (Platts)--30Nov2006

Global crude futures climbed further Thursday as fundamental and
technical factors pushed prices out of a $4-$5/barrel range seen over the last
two months, brokers said, as bullish sentiment extended into a fifth day.
At 1042 GMT the January ICE Brent futures contract changed hands at
$63.46/barrel, up 39 cents. Both the January WTI futures contracts on ICE and
NYMEX traded at $62.58/barrel, up 12 cents.
"Technically this market is looking very strong. We had a bullish settle
last night and that has added impetus to today," a London-based broker said.
The rise in prices has come from an accumulation of fundamental and
technical factors.
Early in the week, a weak US dollar and weather forecasts predicting that
colder temperatures would hit the key consuming region of the northeast US by
the weekend added momentum to the price rise.
On Wednesday the latest US inventory report by the Energy Information
Administration showed unexpected draws in product stocks.
Analysts had been expecting small builds in gasoline and distillate
stocks but the EIA reported that US gasoline and distillate inventories fell
by 600,000 and 1 million barrels, respectively, during the week ending
November 24.
Crude inventories fell by 300,000 barrels, in line with expectations.
On the technical side, front-month ICE Brent futures has been trading in
a range over the past two months with a low of around $57.50/barrel and a high
of $62.50/barrel.
Wednesday's US stock data pushed January ICE Brent through $62.50/barrel
to settle at over $63/barrel, the highest settlement since mid-September. The
technically strong settlement, and a break through a late September resistance
level of around $63.60/barrel may provide further impetus for prices to
continue rising, brokers said.
"If we add another 30-40 cents today from where we are now and break
through certain resistance levels I think we'll see some more hedge funds come
into the market again to push up prices," one broker said.
--Jean-Luc Amos, jean-luc_amos@platts.com

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