ICE Brent retreat from Thursday's hike, slipping below $62.50/b

London (Platts)--23Mar2007

Crude futures retreated slightly from Thursday's hike in early European
Friday trading due to profit taking following yesterday's strong rally.
However, sufficient price support is still around, especially due to bullish
gasoline fundamentals in the US, market players said.
At 1042 GMT, the May ICE Brent contract was down 25 cents at $62.26/b,
with the front-month WTI contracts at NYMEX and ICE were seen at $61.41/b,
down 28 cents.
On Thursday, front-month crude futures rose sharply, with May ICE Brent
settling above $62.50/barrel, gaining $1.50/b during the course of the day.
The surge was mainly triggered by the bullish weekly US petroleum data for
products and increasing refinery utilization. Moreover, the Federal Reserve
Bank's decision to leave rates at 5.25% and the subsequent rally in equity
markets were also seen as bullish factors. Both events lent themselves to
technically-motivated buying in the end.
"The previous weak expiries of Nov and Dec were followed by min-rallies
and what followed the weak expiry of the April contract was no exception. The
rally was triggered by the combination of the equity rally and a weak dollar
and quickly broke resistance lines back towards the highs of the previous
range," Olivier Jakob said in a Petromatrix report.
He added that "gasoline has been lagging in the rally of Thursday but the
cracks are so high that they have a room for correction while still keeping a
supportive base" and stated that the market is also awaiting the outcome of
the final draft on Iran by the UN Security Council, which should give
additional signals to the market.
Product futures were acting in tandem with crude contracts, losing some
of their strong gains seen on Thursday. The April ICE gasoil contract was down
50 cents at $537/mt, while on the other side of the Atlantic, the front-month
NYMEX heating oil and RBOB contracts lost 1.20 cents/gallon and 0.97
cents/gallon at $1.7060/gallon and $1.9478/gallon, respectively.
-- Verena Peternell; verena_peternell@platts.com