New York (Platts)--22May2007

June crude futures on the New York Mercantile Exchange opened 52 cents
lower at $65.75/barrel Tuesday, led by falling RBOB prices and shaking off
potentially bullish news developments. 

     BP shut-in 100,000 b/d of Prudhoe Bay production, but sour crude that is
used on the West Coast tends to have minimal effect on the light, sweet crude
futures contract. Valero's 152,000 b/d Corpus Christie refinery cut rates in
its fluid catalytic cracker, but Citgo was in the process of restarting its
sulfur recovery unit at its Corpus Christie refinery. 

     The overriding concern across the petroleum complex was supply/demand
balances in gasoline ahead of the start of driving season, leaving RBOB as the
price-setter. But the Tuesday contract expiration in crude was likely to move
to the forefront of oil market concerns later in the session. 

     "While [gasoline] inventories seem destined to lag normal levels for some
time and remain vulnerable to periodic short squeezes until a more normal
cushion of stock is accumulated, we think it worth evaluating this market in
more direct economic terms," Tim Evans, energy analyst at CitiGroup, said in a
report. "Rising domestic refinery production, rising imports and rising stocks
may result in increased comfort regarding driving season supplies at some
point even if inventories remain lower than a year ago."

     June RBOB opened 3.53 cents lower at $2.3660/gal and June heating oil
opened 1.49 cents lower at $1.9360/gal. 

		--Linda Rafield, linda_rafield@platts.com