London (Platts)--17Aug2007

Global crude futures recovered on Friday after Thursday's massive selling
spree across the petroleum sector, support coming in particular from US
product futures following a fire that forced Chevron to shut one of two crude
units at its 325,000 b/d Pascagoula, Mississippi, refinery.

     At 1020 GMT, the new front-month October ICE Brent futures contract found
support above $70/barrel, climbing 64 cents to $70.41/b, while September NYMEX
WTI firmed by 64 cents to $71.64/b.

     Middle Eastern crude futures were quiet. At the time of writing, no trade
had been reported in October ICE Dubai, which had settled Thursday at
$66.17/b. October DME Oman was up $2.20 at $68.50/b.

     "Price support this morning is on the back of hurricane Dean and
Chevron's latest refining problems in the US," a London broker said.

     Asked if he believed that the market would hold onto its gains through
the day, the broker said he thought "we will end up rallying about $1.50/b on
the front today."

     Hurricane Dean, now a Category Two hurricane, is expected to gain
strength over the next 24 hours, the US National Hurricane Center said. The
agency's latest five-day track shows Dean skirting Jamaica early Sunday then
making landfall on Mexico's Yucatan peninsula early Tuesday. The storm could,
however, track further toward the north, potentially bringing it closer toward
the central Gulf of Mexico, where most of the US oil and gas production is
situated.

     "We must keep in mind that Hurricane Dean should not yet be counted off.
If it hits land over Yucatan it will loose some strength but history has shown
that a Hurricane crossing across the Yucatan can quickly regain strength once
it steps back into the Gulf," Petromatrix said in a report Friday.

     Recent trading sessions have been dominated mainly by financial markets,
and Thursday's plunge was triggered by strong falls in global equities that
resulted in funds liquidating positions in oil futures, market sources said.

     Analysts said that, leaving fundamentally bullish factors aside, it was
doubtful if the market would see some short-covering ahead of the weekend.

     "One would expect in a 'normal' market to see some short covering in
front of the weekend given the path and strength of Hurricane Dean, and given
as well that $70/b has held as a strong support for WTI. If some funds need
to continue to liquidate their positions, they will probably wait/hope for
such short covering to sell into, but we think reasonable for short positions
to be reduced in front of Dean," Petromatrix said.

     US and European product futures were bullish in the wake of the Chevron
refinery fire, with September ICE gasoil up $6.75 at $623.50/mt and September
NYMEX RBOB and heating oil up 4.49 cents and 2.02 cents at $2.0232/gallon and
$2.0031/gallon, respectively.

-- Verena Peternell. verena_peternell@platts.com