Crude futures little changed despite US crude stock draw

London (Platts)--29Dec2006

Global crude futures were rangebound Friday morning, on the last day of
trading in 2006, amidst very thin trading, and largely ignoring a significant
draw in US crude stocks on Thursday, brokers said.
At 0938 GMT the February ICE Brent futures contract changed hands at
$60.55/barrel down 12 cents from Thursday's settlement. The WTI contracts on
ICE and NYMEX were both weaker by 17 cents at $60.36/barrel.
Market players said that there is very little activity and what trading
there is is book squaring ahead of the end of 2006. They added that the market
is waiting for a new year to start where the first session could be as lively
as that of January 03 2006, where front-month Brent futures rose by almost
$2.50/barrel and volumes traded almost tripled compared with the last session
in 2005.
On Thursday, the US Energy Information Administration reported an 8.1
million barrel drop in commercial crude stocks, much higher than the 2.4
million barrel draw analysts had projected and the 2.1 million barrel drop
reported by the American Petroleum Institute.
Despite the large draw in crude stocks, futures prices, albeit volatile,
did not rally. The decline in crude stocks primarily occurred in the Midwest,
where inventories dropped 7.5 million barrels.
"This is presumably the result both of crude that would normally have
flowed north being diverted (at Midland in particular), down towards the
coast, as well as delays from the Gulf of scheduled pipeline deliveries of
Midwest-bound imports," Paul Horsnell and Kevin Norrish, energy analysts at
Barclays Capital, said in a report.
Gasoline stocks rose 3 million barrels, much higher than the 850,000
barrel build expected and the 1.4 million barrel increase reported by the API.
Distillate stocks rose 500,000 barrels, less than the 850,000 barrel build
analysts had anticipated and the 2.6 million barrel increase reported by API.
Product futures prices were all weaker. January ICE Gasoil futures were
down by $4.00/mt to $516.50/mt, a level not seen since early November. January
NYMEX heating oil futures fell by 1.71 cents to $1.6060/gallon. January RBOB
futures weakened by 0.25 cents to $1.5955/gallon. Both NYMEX contracts are
expiring at the end of the trading session today.
--Jean-Luc Amos, jean-luc_amos@platts.com

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