Crude futures extend gain on possible further OPEC cut, US stocks

London (Platts)--16Nov2006

Crude oil futures extended gains with bullish momentum sustained from
Wednesday's bullish US stock report and talk of a possible further OPEC cut in
December, traders said Thursday.
The front-month January Brent futures contract was trading 47 cents above
Wednesday's settlement at $61.08/barrel at 1219 GMT with NYMEX WTI for
December delivery up 42 cents at $59.18/barrel. The ICE WTI futures contract
for December was also up 42 cents at $59.18/barrel.
On Wednesday, the US DOE reported that distillate stocks fell 3.6 million
barrels against a projected small build with gasoline stocks also dropping 3.7
million barrels. However, interestingly, the distillate drawdown was largely
attributable to the drop in diesel stocks which fell a massive 3.8 million
barrels.
US heating oil inventories actually rose by 100,000 barrels last week and
remain 6 million barrels above year ago levels. Temperatures across the US
east coast, a major heating oil consuming region, looked set to remain warm
and above average for the forthcoming week.
Crude oil stocks rose 1.3 million barrels last week, according to the US
Department of Energy and remain 14.6 million barrels above year ago levels.
OPEC President Edmund Dakoru said Thursday that the cartel was likely to
cut production again in December on top of its 1.2 million b/d cut when the
ministers meet in Abuja on December 14.
"Stocks are higher than where they were when we met in Doha so I would
think we are set for a further cut in December," Daukoru told Platts by
telephone from Abuja.
In early November, the International Energy Agency head Claude Mandil
said that global oil stocks going into the northern hemisphere winter demand
season are "well but not extremely well," and do not justify OPEC's 1.2
million b/d production cut that began November 1. The IEA also remain very
concerned about the prospect for a further OPEC cut in December.
--Paul Wightman, paul_wightman@platts.com

For similar stories, take a trial to Platts Oilgram Price Report at
http://www.platts.com/Request%20More%20Information/


 

Copyright © 2005 - Platts

Please visit:  www.platts.com

Their coverage of energy matters is extensive!!.