London (Platts)--24Aug2007

Global crude futures were moving sideways in early European trading
Friday, looking for direction after most of the recent market-moving news
eased, as Mexican crude oil production seems back on track, sources said.

     However, front-month western crude futures benchmarks ICE Brent and NYMEX
WTI failed to break through the psychologically important $70/barrel benchmark
on Friday, with ICE Brent catching up to WTI, even trading at times to a
premium to the US Light Sweet crude contract. This development was a result of
the latest US weekly inventory data, which showed an unexpected build in crude
stocks, sources said.

     At 11:04 London time (12:04 GMT), front-month October ICE Brent futures
were down 18 cents to $69.68/b, while October NYMEX WTI fell 12 cents to
$69.71/b, with Brent trading to a premium to WTI of 3 cents/b in intra-day
trading for the first time in a month.

     "In the lack of clear directional trade the emphasis has shifted back to
selling WTI/buying Brent due to the lack of storm damage...That process had
for now mainly an impact on the Brent timespreads that have lost most of their
contango, while the backwardation in WTI remains stable on the front spreads,"
analysts in a Petromatrix report said Friday.

     Middle Eastern crude futures were a tick higher, with October DME Oman up
10 cents to $67.40/b, while October ICE Dubai failed to trade so far, with
interest only seen in inter-month spreads.

     "With no fresh supportive news out and Hurricane Dean gone, the market is
quiet this morning, but I think we could see a bit of profit-taking this
afternoon ahead of the weekend," a London-based broker said.

     "However, falling Asian and European stock markets on Friday morning are
always an issue that can strike at any time...until we know the banks' true
exposure to the subprime mortgage market there is a real threat to the stock
market and consequently commodity markets in general," the broker added.

     Mexico's state-owned oil company Pemex said late Thursday it had resumed
crude and natural gas production in Campeche Bay after it completed checks on
its sea platforms and found that there was little damage in the wake of
Hurricane Dean. 

     Pemex said that "instantaneous production" in the Bay of Campeche had
reached 342,000 barrels of crude "and it's expected that extraction will
accelerate in the coming days until it reaches the same level as before the
wells were shut down." 

     "There are currently no tropical storms on the radar screen, no real
expectations on the next OPEC meeting, no significant supply disruptions or
new geopolitical developments, no clear consensus on equities--hence the oil
market is drifting to an anemic mode symptomatic of the shoulder period
between the end of the gasoline and the start of the [heating oil] seasons,"
Petromatrix analysts said, summing up the current lack of direction in the
market.

     Turning to product futures, front-month NYMEX heating oil and RBOB
futures are also a far cry from breaking back above the $2/gallon benchmark,
with September NYMEX RBOB down 0.47 cents to $1.9185/gallon. September NYMEX
heating oil lost 0.60 cents to $1.995/gallon, however keeping a strong premium
of above 7.5 cents/gallon to gasoline.

     In Europe, September ICE gasoil was more or less unchanged from last
night's settlement value, down 25 cents to $615.25/mt.

--Verena Peternell, verena_peternell@platts.com