London (Platts)--10Sep2007

Global crude futures corrected downwards Monday as the market sought to
take advantage of a strong performance at the end of last week by taking
profits, market sources said.
     At 10:31 GMT, the ICE Brent October futures contract was at
$74.45/barrel, down 62 cents, and the NYMEX WTI October contract was down 52
cents to $76.18/b, widening the spread between the two front-month contracts
to $1.73 from $1.63 on Friday.
     "On a technical basis the market appears to be overbought," said a
London-based broker. "Now we are seeing a little correction. Fundamentally,
the market is still quite strong though." 
     Last week renewed activity by speculative funds saw some
contracts--notably ICE gasoil and NYMEX WTI and heating oil--all approach or
surpass previous highs.
     The weekly CFTC report said net futures exposure in WTI had increased by
over 25,000 contracts, reversing the trend of the last four weeks, according
to Petromatrix analysts.
     "The increase of speculative net length was not limited to WTI but was
taking place across the oil spectrum. Heating Oil net length continued to
increase for the fourth week in a row breaking the pattern of the two previous
years; and even RBOB Gasoline started to attract some fresh long positions,"
Petromatrix said.
     
     OPEC MEETING 
     In the background, market sources pointed to OPEC as a possible source of
further bearish sentiment should the organization announce an increase in
output quotas at its meeting in Vienna starting Tuesday.
     "This market has got a bearish sentiment today and any comment from OPEC
[about increasing output] could exacerbate that," said a London-based broker.
     "This meeting has come up quietly, everyone has been concentrating on the
sub-prime mortgage issues in the US up to now. I think people are expecting
some bearish comments though." 
     Opinions were mixed, however.
     "I can't see them doing anything at this meeting--nothing new," another
broker said. "There could be an extra 500,000 b/d increase, up another 500,000
by the end of the year. But it all depends on the market."
--Paul Hailey, paul_hailey@platts.com