London (Platts)--10Jul2007

Global crude futures drifted lower Tuesday amid quiet trading, in what is
becoming a typical start to a trading session, brokers said. Strong resistance
levels and a spate of refinery glitches negated the International Energy
Agency's report warning of increasing tightness on world oil markets over the
next five years.

     At 09:54 GMT the August ICE Brent futures contract changed hands at
$75.37/barrel, down by 41 cents. The August WTI futures contracts on both
NYMEX and ICE fell 29 cents to $71.90/b.

     "You see this more and more--the session starts by drifting lower with
not much volume going through," a London-based broker said. They added that a
shift in futures curve structure as well as a change in intermonth spreads was
also adding uncertainty to the market.

     On Monday the IEA released warned in its 2007 Medium-Term Oil Market
Report that it saw world oil markets becoming increasingly tight beyond 2010,
"with OPEC spare capacity declining to minimal levels by 2012." The report
projects that OPEC spare capacity could be as low as 1.55 million b/d in 2012.

     This in turn pushed prices higher, traders said, with front-month ICE
Brent hitting an intra day high of $76.34/b, a level not seen since August 10,
2006. 

     On the other side of the Atlantic though, the NYMEX WTI futures rise was
muted and later weakened in value as reports late Friday of three refinery
problems took a toll on crude futures while pushing NYMEX gasoline futures
to a one month high. 

     Valero's 245,000 b/d Texas City went down due to a power outage; BP
delayed the restart of a reformer at its 475,000 b/d Texas City facility; and
Valero's 90,000 b/d Ardmore, Oklahoma refinery took its fluid catalytic
converter offline for unplanned maintenance. In addition, BP's 410,000 b/d
Whiting facility took a crude distillation unit offline.

     Middle East crude futures also fell in price with the September ICE Dubai
contract off by 20 cents at $69.45/b. September Oman futures on the DME
weakened by 23 cents to $69.85/b, with volumes traded and open interest
generally on a downtrend in the past few weeks.

     Product futures were weaker. The July ICE gasoil future contract traded
at $644.25/mt, down $1.00/mt. The energy complex "leader" NYMEX gasoline
futures were a touch higher at $2.3465/gallon, up 19 points. July NYMEX
heating oil fell 30 points to $2.0898/gal.