NYMEX crude opens 15 cents lower, shrugging off OPEC cut

NYMEX crude opens 15 cents lower, shrugging off OPEC cut

New York (Platts)--20Oct2006

November crude futures on the New York Mercantile Exchange opened 15
cents lower at $58.45/barrel Friday, shrugging off OPEC's 1.2 million b/d
production cut announced late Thursday.

"While it would be surprising if the recent high level of market
skepticism and misunderstanding about OPEC were to disappear completely and
rapidly, we believe that ministers have now put a fairly strong floor under
prices," Kevin Norrish, energy analyst at Barclays Capital, said in a report,

"That does not of course protect prices from a further speculative attack
to the downside, but such a drive down would now look distinctly unsustainable
in our view."

However, aberrant price behavior would not be surprising given today's
contract expiration and extreme weakness in the front of the crude curve.
November/December opened at minus $2.00/barrel, unchanged from the previous
day's settlement, but the second weakest settlement since the contract was
launched in 1983.

November unleaded gasoline opened 94 points lower at $1.48/gal and
November RBOB opened 78 points lower at $1.5250/gal. November heating oil
opened 2.01 cents lower at $1.70/gal, plagued by high levels of distillate
inventories in the US and warmer-than-normal temperatures across the Atlantic
Coast.

--Linda Rafield, linda_rafield@platts.com

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