Crude futures edge lower after steep fall on US crude stock draw

London (Platts)--23Nov2006

Global crude futures eased lower Thursday after a sharp fall on Wednesday
after a greater-than-expected build in US crude stocks, traders said.
At 1117 GMT the ICE Brent January futures contract traded at
$59.16/barrel, down 33 cents. The ICE WTI and NYMEX WTI contracts traded down
27 cents and 25 cents respectively at $58.97 and $58.99/barrel.
"Volumes are very low and there is nothing going on at all. Prices have
barely moved in the past two hours," a London based broker said.
The petroleum complex fell heavily on Wednesday as the US Energy
Information Administration and American Petroleum Institute released their
weekly crude and product stock data.
The API reported a 1.7 million barrel draw in crude stocks, however the
market reacted to the unexpected 5.16 million barrel weekly build in US
commercial crude inventories according to the EIA.
Both ICE Brent and NYMEX WTI front-month benchmark contracts lost nearly
a dollar in value upon the release of the stock data.
The EIA reported a 1.4 million barrel build in total US gasoline stocks,
which was contrary to industry forecasts for a slight draw. The gasoline stock
hike was centered in PADD I (US Atlantic Coast). The API showed a 766,000
barrel draw in gasoline.
Meanwhile, distillate stocks fell 1.2 million barrels, according to the
EIA, larger than the 675,000 barrels draw anticipated by analysts, and near
the 1.4 million barrel draw the API reported. However, the draw was focused in
ultra low sulfur diesel, while heating oil stocks held steady. That, combined
with a unseasonally mild weather forecast for the northeastern US for next
week, kept heating oil under pressure.
Due to the US Thanksgiving holiday Thursday and Friday, NYMEX open outcry
trading is closed for these two days, however electronic trading is occurring
on the CME Globex and NYMEX Clearport.
--Jean-Luc Amos, jean-luc_amos@platts.com

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