Crude prices continue to retreat from last week's highs

London (Platts)--5Mar2007

Crude prices continued their downward trend on Monday, extending a
sell-off which started in late Friday, amid a lack of fresh bullish news
combined with weaker technicals trading, brokers said.

At 11:12 GMT, the front-month April ICE Brent futures contract was seen
at $61.02/barrel, down $1.05/barrel from Friday's settle. Similarly, the April
WTI contract on NYMEX and ICE lost $1.04/barrel to $60.60/barrel, thereby
slipping below the psychologically-important $61/barrel mark.

April ICE Brent futures prices skyrocketed last week on bullish US
petroleum product inventory data and increased tensions surrounding Iran,
hitting this year's high at $62.49/barrel on March 1. After a last price
rally on Friday, prices headed south towards $61/barrel, possibly even
retreating further.

"I think the losses are a follow through from Friday night...it looks
like a bit of liquidation and correction across the commodity board is taking
place, with crude catching up with metals," a London-based broker said.

"However, despite technicals not looking particularly strong, they should
still keep ICE Brent prices above $60/barrel, with all eyes on gasoline," the
broker added.

Meanwhile, Iran's OPEC governor, Hossein Kazempour Aredebili, was quoted
Monday as saying that market fundamentals do not require OPEC to cut
production when it meets in Vienna in March and suggesting that the current
production level of 26.3 million b/d be maintained.

"Given the supply and demand figures, Iran believes that there is no need
to decrease (OPEC's) oil supply under current conditions," Kazempour was
quoted as saying in an interview with the Tehran Emrooz newspaper, possibly
adding additional pressure on prices.

Product futures saw similar losses on Monday, with the March ICE gasoil
contract down $7.75 to $537/mt. In the US, NYMEX heating oil and RBOB were
down 2.27 cents and 3.05 cents to $1.7455/gallon and $1.8713/gallon,
respectively.

--Verena Peternell; verena_peternell@platts.com