ICE Brent futures rise above $69/barrel to new 2007 high

London (Platts)--13Apr2007

Global crude prices moved higher on Friday, with ICE Brent hitting a new
2007 high above $69/barrel and WTI futures also recovering, brokers said,
supported by falling oil stocks and profit-taking by traders on the unusually
wide spread between Brent and WTI.
At 1130 London time (1030 GMT), the May ICE Brent futures contract, due
to expire by the end of European trading Friday, was up 43 cents/barrel at
$69.15/b, having hit an intra-day high earlier in the day of $69.59/b, the
highest level seen since last September.
May WTI on both NYMEX and ICE was up 47 cents at $64.43/b, reducing
Brent's premium over WTI to $4.72/b. May NYMEX WTI saw a late rally Thursday,
climbing by more than $2/b in intra-day trading.
"WTI's rally on Thursday was due to profit-taking on the arbitrage
between Brent and WTI due to the Brent expiry on Friday," a London-based
broker said. "The arbitrage moved by a dollar, therefore taking the spreads
with it," he added, explaining the stronger front end of the WTI curve.
Further price support came from the International Energy Agency's monthly
report on Thursday, which said OECD stocks were likely to have seen their
biggest first quarter draw for ten years.
"Crude oil stocks in Europe are 29 million barrels lower than a year ago
and the lowest level for a month of February since 2003. The combination of
lower European crude oil stocks and record high crude oil stocks in Cushing
should maintain the dichotomy between Brent and WTI," analysts from
Petromatrix said in a report.
Despite ample crude stocks at Cushing in the US, the delivery point of
the NYMEX crude contract, bullish market sentiment is being supported by
unplanned outages at US refineries, which have fuelled fears about product
supply shortages in the peak summer season.
Colder weather in the US Northeast has also pushed heating oil prices up.
Citgo has shut down a 150,000 b/d crude unit and a reformer at its
429,500 b/d refinery in Lake Charles, Louisiana, an industry source said last
Wednesday. The source said the refinery shut the units over the weekend for
unplanned maintenance, with work expected to last one week.
Product futures were up as well Friday, with the new May ICE gasoil
futures contract up $7.75 at $603.75/mt. In the US, May NYMEX heating oil and
RBOB were up 1.11 cents and 1.02 cents to $1.9172/gallon and $2.2020/gallon,
respectively.
--Verena Peternell, verena_peternell@platts.com