Crude down on weakened curve, Rice comments, OPEC

Crude down on weakened curve, Rice comments, OPEC

New York (Platts)--31May2006

World benchmark crude futures prices were sharply lower Wednesday on a
variety of factors.

Among them were a weakening of the front of the curve, products markets
under selling pressure ahead of the afternoon's contract expiration, market
reaction to US Secretary of State Condoleezza Rice's announcement that the US
was prepared to join talks with Iran, and the seeming lack of interest on the
part of OPEC ministers to lower the cartel's production ceiling when they
convene in Caracas on Thursday.

The NYMEX July light, sweet contract was down $1.83/barrel, to $70.20, at
1:23 p.m. EDT (1723 GMT), with an intraday range of $70.05-$71.40/barrel.

In London, IPE Brent was down $1.75/barrel, to $69.30, with an intraday
range of $69.07-71.15/barrel.

July/August traded out to a low of minus 95 cents Wednesday after
settling Tuesday at minus 84 cents despite expectations for a 1.4 million
barrel stock draw in the weekly petroleum inventory data from the US
Energy Information Administration, both to be issued this week on Thursday.

On the products side, the NYMEX June unleaded gasoline contract was down
4.49 cents/gal, to $2.1050, with an intraday range of $2.0725-$2.1225/gal. The
June heating oil contract was down 6.79 cents/gal, to $1.9360, with an
intraday range of $1.9400-$1.9925/gal.

Rice earlier Wednesday said the US will join its European allies in talks
with Iran once Tehran "fully and verifiably suspends" its alleged nuclear
weapons program. Rice also said the US acknowledges Iran's right to civil
nuclear energy.

In Caracas, meanwhile, OPEC ministers are widely expected to leave the
cartel's production quotas unchanged at 28 million b/d.

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