London (Platts)--17Dec2007
Global crude futures retreated slightly during European morning trading
on Monday from Friday's settlements, though remaining well above $90/barrel.
Weather-related issues in the US supported the complex in earlier trading,
which is counteracting effects of a stronger US dollar and weaker Asian equity
markets, sources said.
Friday trading was dominated by oil demand and supply forecasts for 2008
by the International Energy Agency and OPEC as well as US economic indicators
and a firmer dollar. Despite seemingly bullish demand forecasts by the
IEA for 2008, front-month NYMEX WTI in particular lost some ground ahead of
settlement, flipping back into contango and widening the discount to the
expiring January ICE Brent contract to 74 cents/barrel.
At 11:12 London time, the new front-month February ICE Brent futures
contract was down 27 cents to $91.42/b, while January NYMEX WTI futures
lost 47 cents to $90.80/b, with the contango between January and February seen
at 27 cents/b.
Looking at Middle Eastern crude futures, the February DME Oman futures
contract moved higher, gaining 37 cents to $87.92/b.
"There is nothing new moving the market this morning from a fundamental
perspective on the oil side," a London-based trader said.
"Apart from colder weather in the US, the US dollar got quite a bit
stronger over the weekend...Asian equity markets were also quite weak
overnight, which has filtered through into European financial markets," the
trader added.
Over the weekend, cold weather in the US pushed NYMEX heating oil futures
higher, as a major snowstorm tore through eastern Canada and the northeastern
US--the key consuming region for heating oil--Sunday making driving conditions
treacherous and forcing airports to cancel numerous flights. This resulted in
heating oil futures for January holding on to strong gains seen last week,
following the release of US weekly stock data, which showed a strong 1 million
barrel draw. Given the current cold weather, a similar bullish sentiment might
return in this week's US stock data.
"Weather-wise, the US Northeast is currently experiencing a series of
winter storms in the north but temperatures are still expected to change to
above normal around Christmas and warmer temperatures are also expected in
Europe towards the end of the 10-day period," analysts for Petromatrix said in
a report Monday.
Looking at product futures, the middle distillates complex remained
relatively strong Monday, with January ICE gasoil down $1.75 to $821.75/mt,
tracking crude's pre-settlement losses on Friday. January NYMEX heating oil
was up 0.66 cents to $2.6145/gallon.
Finally, January NYMEX RBOB lost 0.67 cents to $2.335/gal.
--Verena Peternell, verena_peternell@platts.com
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