What's Moving the Oil Markets?

What's Moving the Oil Markets?

•Crude futures in London inched higher after Monday's huge product-led sell off pushed the front-month December ICE Brent futures contract $2.4 lower, or to a new 2006 low.

•Prices also fell on comments by Kuwaiti Oil Minister Sheikh Ali al-Jarrah al-Sabah, who said OPEC was unlikely to fully implement its agreement to cut output by 1.2 million b/d starting November 1.

•"The market feels very negative, but its unlikely prices will fall back to $50 per barrel," one broker at Bache Financial said. The market appeared to be looking towards the expiry of the US products market to more clearly define future price direction.

•Ample supplies of gasoline and heating oil in New York Harbor, home of the NYMEX delivery point, sent product prices plummeting Monday. Inventories are still at comfortable surpluses against yearly averages despite refinery maintenance programs in the US. Evidence of ample supply was seen in the contango in the front of both the RFG and RBOB curves.

Updated: 10/31/06

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