ICE Brent falls as Norway fields restart, hedge funds sell

ICE Brent falls as Norway fields restart, hedge funds sell

London (Platts)--27Oct2006

Brent crude futures in London drifted lower Friday, extending the
previous day's losses, after Norway's Statoil confirmed it has restarted
200,000 b/d of shut-in production in the North Sea.
The front-month December Brent futures contract was 41 cents lower at
$60.44 per barrel trading down towards the intra-day low of $60.13 per barrel.
ICE WTI futures for December was trading 28 cents lower at $60.08 per barrel.
Statoil confirmed earlier it had restarted its Snorre and Vigdis fields
in the North Sea after a two-week halt due to unsafe lifebaots.
The losses were heightened by fund selling with the hedge funds shedding
length or re-establishing fresh shorts on the December ICE futures contract,
said brokers.
"The hedge funds are buying the gasoil cracks," one Man Financial broker
said. Hedge funds were buying November gasoil and selling December Brent to
establish the crack spread value.
Overall, trading volumes were said to be good on both spreads and flat
price.
On the OPEC front, Kuwait, Libya and Venezuela October 26 joined the
ranks of OPEC producers restating their intention to cut crude production in
line with pledges made at OPEC's emergency meeting in Doha last week.
Saudi Arabia, the UAE, Iran and Nigeria had already signaled earlier this
week that their pledged cuts would go ahead.
"The market seems to have taken on-board that OPEC is going to cut," a
Man Financial broker said.
Paul Wightman, paul_wightman@platts.com

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