Crude futures extend losses, dragged down by products

London (Platts)--12Mar2007

Global crude futures continued to fall Monday in thin volumes,
extending large losses on Friday, led by a decline in product prices. Market
participants also attributed some of the thin volumes being traded as a result
of players examining the Forties program released Monday morning.
At 1128 GMT, the April ICE Brent futures contract changed hands at
$60.65/barrel down 45 cents. Both April WTI futures contracts, on NYMEX and
ICE, traded down 72 cents at $59.32/b.
"It's very quiet this morning. Products have dragged prices down and are
still doing so and also there's not much support for WTI as it's fallen
through $60. In the future US gasoline will have to rebound which will prop
prices up," a London-based broker said.
The broker added that industry players are looking at the latest Forties
program and trying to interpret the data.
The loading program for North Sea Forties crude has been set at 560,000
b/d for April, marginally down from 561,290 b/d in the longer month of March,
the released schedule showed Monday. The total for the month stands at 16.8
million barrels.
"The program is down a tiny bit and as the US has quite a lot of WTI
crude at the moment we are seeing a wide arbitrage value between Brent and
WTI," a broker said.
Currently, the spread between April ICE Brent and NYMEX WTI futures was
pegged at $1.33/b, the widest level since early January.
In other news, OPEC minsters are due to meet Vienna on March 15.
Its president, Mohammed Bin Dhaen al-Hamli, on Monday, described the
cartel's compliance with its 1.7 million b/d of agreed production cuts as
"very good" and said world oil inventories, as a result, had come down.
Global inventories had come down and were now below the five-year
average, Hamli told reporters on the sidelines of a conference on the role of
national oil companies organized by the Baker Institute in Dubai. The fall in
stocks was a "function of the level of compliance" with the OPEC cuts, said
Hamli, who is also the UAE's oil minister.
Amongst the product prices on the futures, March ICE gasoil which expires
at midday was pegged at $525.75/mt, down $10.50/mt. The April RBOB futures
contract on NYMEX traded at $1.8800/gallon down 2.21 cents. Whilst the NYMEX
April heating oil contract fell 2.43 cents to $1.6879/gal.
--Jean-Luc Amos, jean-luc_amos@platts.com