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
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