Crude futures rangebound, still eyeing Iran situation

London (Platts)--10Apr2007

Global crude futures were rangebound Tuesday with the focus remaining on
the situation in the Middle East.
The spread between front-month NYMEX WTI and ICE Brent futures widened to
$5/barrel as WTI collapsed on Monday due to the monthly Goldman Sachs
Commodity Index roll as well as mounting crude inventories in the US.
At 1050 May ICE Brent futures traded at $66.75/barrel, up 16 cents, and
May NYMEX WTI changed hands at $61.88/b, up 37 cts. The May ICE WTI contract
also traded higher at $61.86/b, up 35 cts.
"It's pretty rangebound today. There's not much going on. People are
still concentrating on the situation in Iran and also working out what
happened to prices on Monday," a broker said.
Prices fell significantly on Monday as mounting crude inventories in the
US Midwest, particularly at Cushing, Oklahoma, home of the NYMEX delivery
point, sparked weakness in the front-month spread.
Further to this, Monday marked the beginning of Goldman Sachs' five-day
roll period when positions held as part of the company's commodity index get
moved from the front month into the second month contract.
The May/June spread settled at -$2.80/b on Monday after closing at
-$2.09/b on Friday.
Brent futures fell around $2/b Monday while WTI futures on NYMEX fell
almost $3/b, amid thin liquidity due to an extended holiday weekend in Europe,
despite the Iranian President Mahmoud Ahmadinejad's announcement that his
country was now producing enriched uranium on an industrial scale and his
warning that the Islamic republic would not let world powers delay its nuclear
program.
In response, UN chief Ban Ki-moon on Monday urged Iran to comply fully
with UN demands that it halt sensitive nuclear fuel work. "It is very
important for any (UN) member country to fully comply with Security Council
resolutions," the UN secretary general told reporters. "I urge the Iranian
government to do so."
"Iran is still the main issue for the market but prices didn't rise after
the comments from Iran (on Monday) because it's known that they are doing it
(enriching uranium). Until there is perhaps military action from the US, we
will not see a big change in crude prices," a broker said.
Among the futures products April ICE gasoil futures fell $10.50/mt to
$577.25/mt, in line with crude futures, brokers said.
May NYMEX heating oil contract traded up 1.14 cts at $1.8271/gallon while
May RBOB changed hands at $2.1080/gal, up 1.34 cts.
--Jean-Luc Amos, jean-luc_amos@platts.com