•Global crude weakened Monday retreating from Friday's highs as market participants looked to take profit and as concerns over Nigeria eased with the release of a British girl late Sunday, sources said.

•"News of the release [in Nigeria] has had an effect and there's been a small retracement on profit taking," said a London-based broker. "People are thinking that it is a little toppy right now but going forward it is looking stronger. There is momentum in the market now."

•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.

•The International Energy Agency said Monday it saw "a significant improvement in refinery flexibility" alongside increased investment over the next five years. This should increase the ability of the refining sector to process OPEC's mainly heavy and sour spare capacity, it said.

•World crude distillation capacity is forecast to rise by 10.6 million b/d between 2007 and 2012, 9.1 million b/d of which is new capacity with 1.5 million b/d of capacity creep. Some 6.7 million b/d of this expansion will be in the Middle East and Asia, where regional product demand growth will be lower than the growth in refining capacity.

Updated: July 9, 2007