London (Platts)--6Jul2007

Key global crude futures in Europe Friday morning were holding on to
strong late-Thursday trading gains following the release of the latest US
stocks data.

     Front-month ICE Brent was the star in Thursday's trading session,
outperforming August WTI, on the back of bullish physical factors such as
North Sea maintenance, sources said, as well as ongoing conflict in Nigeria's
oil producing region.

     On Friday, August ICE Brent continued the upward rally, exceeding the
$75/barrel mark for the first time since August 14 last year, while August
NYMEX WTI struggled to breach $72/b.

     At 11:15 London time (10:15 GMT) August ICE Brent was up 18 cents to
$74.93/b, while August NYMEX WTI gained 6 cents to $71.87/b, thereby falling
more than $3/b behind August ICE Brent.

     The strong rise in prompt ICE Brent also led to a shift in the curve's
structure, flipping into backwardation for September/October by 31 cents.

     "Prompt ICE Brent is very strong at the moment mainly supported by
physical factors, which is pushing the front-end of the curve higher....if you
look at Cal 08 for example, this is down 70 cents today, so the bullish
momentum is really only at the front," a London-based trader said.

     "North Sea field maintenance, combined with healthy refinery demand and
lower crude stocks in Europe than in the US are these physical support factors
for ICE Brent, I think," he added.

     Some trading sources were surprised by the move up in prices.

     "The fundamentals have been strong for a while but this is a vicious
move," said one North Sea trader. "It seems there's some panic out there and
people are short-covering, grabbing at any offer they can." Prices fell
initially following Thursday's US inventory data from the US Energy
Information Administration, as stocks were building across the barrel, in
contract to widely expected draws, at least for crude.

     The market appeared to shrug off the 3.1 million barrel build in stocks
reported by the EIA and focus on another 400,000-barrel decline in inventories
at Cushing, Oklahoma--home of the NYMEX delivery point--and still tight
product balances despite this week's builds in gasoline and distillates of 1.8
million barrels and 1.2 million barrels, respectively.

     "The instant reaction proved to be one of the best buying opportunities
of the week, and the market within a short space of time brushed aside any
bearish thoughts and continued upwards. Brent was the star all day, lifted by
events in Nigeria taking a new twist with the violent kidnapping and threats
to kill a child, and maybe assisted by the confirmation of the UK interest
rate increase," London-based PVM oil brokers said Friday.

     Middle Eastern sour crude futures meanwhile were weaker Friday. September
DME Oman lost 56 cents to $69.14/b, while ICE Dubai was down 71 cents to
$68.80/b.

     July ICE gasoil was holding above the $640/mt level, up $3.75 from
Thursday's settle at $640.75/mt.

     In the US, August NYMEX RBOB and heating oil were down 54 cents and 3
cents to $2.0819/gallon and $2.2840/gallon, respectively.

--Verena Peternell, verena_peternell@platts.com