Crude futures fall slightly on positive Iran-EU talks

London (Platts)--26Apr2007

Global crude futures Thursday surrendered part of the large gains seen
Wednesday after the release of the latest US inventory data by the Energy
Information Administration and the American Petroleum Institute.

Easing political tension surrounding Iran's nuclear program and last
weekend's Nigerian elections prompted prices to fall slightly in early trade,
market sources said.

On Wednesday, crude futures rallied strongly, driven by unleaded gasoline
after the EIA announced an unexpected draw in gasoline stocks of 2.8 million
barrels, while refinery utilization dropped by a sharp 2.8%, fueling fears of
supply shortages at the start of the US driving season.

At 1023 London time (0923 GMT), the front-month June ICE Brent futures
contract was down 16 cents at $68.41/barrel, holding well above the $68/b
support level.

June NYMEX WTI inched down by 25 cents to $65.59/b.

Despite the slight price retreat on Thursday, market perceptions remains
generally bullish, despite news of progress in talks between Iran the EU.

Refinery issues in the US and low US gasoline supplies ahead of the peak
summer demand season are likely to remain the main market driver for the week
ahead, a London-based broker said.

Further ahead, however, analysts said there was a lack of bullish factors
to support crude futures.

"The problem for crude is to find, apart from gasoline, a justification
to continue an advance to last year highs, this while the geopolitics are
going through some softening and OPEC remains with spare capacity," analysts
in a Petromatrix report said Thursday.

Iranian nuclear negotiator Ali Larijani said Thursday in Ankara that
talks on settling the Iranian nuclear crisis had made some progress towards a
"united view."

"We are aiming just to reach out for a common paradigm to help settle
this problem. I think in some areas we are approaching a united view and that
is to say the best approach is to have the issue settled through negotiation,"
Larijani told journalists.

Product futures were lower as well, with the exception of May ICE gasoil
futures which were tracking Wednesday's late rally. The May contract was up
$5.50 to $595.75/mt. In the US, May NYMEX RBOB was down 0.51 cents at
$2.2775/gallon, while May NYMEX heating oil lost 0.55 cents to $1.8960/gallon.

--Verena Peternell, verena_peternell@platts.com