Crude futures stabilize at $59/barrel as hedge funds roll length

Crude futures stabilize at $59/barrel as hedge funds roll length

London (Platts)--14Nov2006

Global crude oil futures stabilized from overnight levels with few fresh
headlines driving prices, brokers said. The stability comes after Monday's
sell-off caused by milder than expected weather in the US and the NYMEX WTI
options expiry.
The front-month December Brent futures contract ahead of expiry was
trading just 1 cent higher at $59.06/barrel, about 60 cents shy of the
intra-day high so far. NYMEX WTI for December delivery was 15 cents weaker at
$58.43/barrel with ICE WTI 14 cents lower at $58.44/barrel.
The hedge funds were more active on the spreads, brokers said. In the
Brent futures market, the spread between December and January Brent was up 20
cents at -$1.27/barrel in contango from the overnight settlement. The activity
was also seen further as the hedge funds looked to re-position their exposure
down the forward price curve.
Weather across the eastern seaboard in the US was set to remain milder
than normal for most of this week but could turn colder towards the end of the
week, according to Accuweather, the US-based forecaster. European weather was
set to remain above average for most of this week, impacting demand for
heating oil in Germany, the region's largest market for the fuel.
Non-commercials added 14,067 contracts to a long position in the crude
futures market on the New York Mercantile Exchange the week ending November 7,
according to data released Monday by the US Commodity Futures Trading
Commission.
Primarily comprised of hedge funds, non-commercials were long 48,705
contracts of crude futures and options, but short 4,794 lots of futures only.
After totaling all three NYMEX crude contracts -- physically-delivered, e-miNY
and financially-settled, non-commercials were long 45,029 lots. For the last
four weeks, non-commercials have primarily held their long position in the
options market.

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