NYMEX crude falls below $90/b on technical considerations

New York (Platts)--30Nov2007

NYMEX's front-month crude futures on the CME's Globex system were
$1.48/barrel lower at $89.53/barrel Friday with technical considerations
pushing prices through key support levels.

"Despite the deteriorating charts, price declines from current levels
should remain modest," Ed Meir, energy analyst at MF Global, said in a report.

"We think shorts will be reluctant to drive prices much lower from here
in the run-up to the OPEC meeting, knowing full well that a more concerted
decline could prompt OPEC to scuttle a planned quota increase," he said.

OPEC is meeting December 5 in Abu Dhabi to to review output policy, but
has given no definitive signal as to whether it might raise production targets
in response to appeals from consumer bodies such as the International Energy
Agency. Ali Naimi, oil minister of OPEC's most powerful producer, Saudi
Arabia, said this week that world oil markets were well supplied and
inventories at comfortable levels, and that there was a "mismatch" between
fundamentals and current prices.

With open interest fairly high in the $90 puts, those short the option
were forced to sell futures to neutralize the position, exacerbating the
selloff.

Another consideration for the Friday trading session is the December
contract expiration in the product markets. Both RBOB and heating oil were
down over 3 cents in overnight trading.

--Linda Rafield, linda_rafield@platts.com