London (Platts)--28Aug2007

Global crude futures drifted sideways in early Tuesday trading, calming
down after Monday's volatile session, which was driven by a mix of bullish and
bearish news amid relatively low volumes due a public holiday in the UK.    
     At 09:58 GMT the October ICE Brent futures contract changed hands at
$71.02/barrel, up 7 cents. The October WTI contracts on ICE and NYMEX were up
8 cents at $72.05/b, widening the WTI/Brent spread to over $1/b for the first
time since 20 August.
     "[NYMEX RBOB futures'] widening backwardation is pulling the WTI
backwardation higher with it," Petromatrix analysts wrote in a report. "The
pull on the WTI backwardation is then in turn putting WTI at a greater premium
to Brent, reversing the weakness seen after the release of last week's
statistics."
     On Monday, NYMEX RBOB futures rallied as supportive fundamentals--with
gasoline supply/demand balances tightening--put a floor on prices last week.
Last Wednesday, the Energy Information Administration reported a 5.7 million
barrel decline in US gasoline inventories amid record implied demand of 9.672
million b/d.
     With balances so tight ahead of the US refinery maintenance season, the
market remains hypersensitive to refinery issues.
     These bullish factors overpowered a further weakening in the equity
markets and a slight strengthening of the US dollar against other currencies.
     The weakening of the equity markets due to issues in the US sub-prime
mortgage sector has had a major influence on energy prices over the past few
weeks.
     "With declining equities and a stronger Dollar Index (both moderately)
providing no support, RBOB was yesterday the main leading sponsor of the
energy complex," Petromatrix said. 
     Meanwhile, Middle East crude futures fell, with the October Oman contract
down 68 cents to $68.04/b. The October ICE Dubai contract fell 6 cents to
$67.89/b.
     ICE gasoil was up significantly, catching the rally which mainly occurred
after its close on Monday. The September contract was at $630.00/mt, up
$13.00/mt at it's highest level for almost two weeks. US NYMEX products on the
other hand, took a breather with September RBOB up 36 points to
$2.0429/gallon. NYMEX heating oil traded at $2.0100/gal, 3 points higher. 

--Jean-Luc Amos, jean-luc_amos@platts.com