Crude eases Monday despite news of some OPEC cuts

MARKET UPDATE: Crude eases Monday despite news of some OPEC cuts

Singapore (Platts)--2Oct2006

Benchmark US crude futures were unwinding Friday's modest gains in Asian
trading Monday, despite news that other OPEC producers might join Nigeria and
Venezuela in implementing supply cuts.
A gasoline-driven rally that had helped November New York Mercantile
Exchange crude futures to a 15 cents higher close of $62.91 Friday also seemed
to have lost steam. The front-month NYMEX light sweet crude contract traded at
$62.76/barrel at 752 GMT Monday, down 15 cents.
November IPE Brent futures on the Intercontinental Exchange changed hands
at $62.23 at 756 GMT, down 25 cents from Friday's close. The contract had shed
6 cents in Friday's session.
On Friday, Venezuela joined fellow OPEC member Nigeria in initiating
voluntary crude cuts, and the cartel's acting secretary general Mohammed
Barkindo said he did not rule out other members following suit.
OPEC said Friday that Venezuela is to make a voluntary cut of 50,000 b/d,
adding to Nigeria's announcement Thursday of a 5% cut in exports, amounting to
a reduction of 120,000 b/d from the West African producer.
"Consultations with Dr Daukoru are ongoing," Barkindo said, referring to
OPEC president Edmund Daukoru's discussions with OPEC member countries. "So
far, this is what we can confirm from Nigeria and Venezuela," he told Platts.
"We hope that other countries will evaluate the market and act accordingly."
Meanwhile, it remained unclear whether Saudi Arabia, world's number one
crude exporter, was reining in supply. Saudi Aramco was not in the process of
cutting its crude allocations, a source close to the national oil company
Saudi Aramco said Friday.
Saudi crude supply volumes to Europe and the Mediterranean remained
unchanged for November, traders said. Rumors that some Med refiners had been
allocated one cargo less than their quota for October could not be verified,
while others were said to have themselves opted not to lift on account of the
higher Saudi official selling prices.
The market also brushed off a weekend fire at a diesel unit of a US
refinery. Giant Industries Sunday said it had been forced to shut down the
ultra low sulfur diesel processing unit at its 62,000 b/d refinery at Yorktown
in the state of Virginia after a fire broke out at about 10:00 am local time
on Saturday.
US distillate stocks have built up to comfortable levels over the past
weeks, and were sitting 19.29 million barrels above the five-year average in
the week ended September 22.

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

Please visit: www.platts.com

Their coverage of energy matters is extensive!!.