London (Platts)--25Sep2007

Global crude futures weakened further Tuesday, continuing to retreat from
last week's all-time highs as traders liquidated hurricane premiums after the
storm threat in the US Gulf receded and shut-in production there started to
come back online. However, the US National Hurricane Center said Tuesday it
will monitor early developments of a new tropical storm--named Karen--that
could hit the area.

     At 10:23 GMT, the November ICE Brent contract was down 50 cents to
$78.41/b, while the NYMEX and ICE November WTI contracts were also weaker, by
73 cents to $80.22/b.

     "The softening is due to light liquidation of precautionary positions
taken out late last week as fears that there could be storm damage to US Gulf
oil facilities over the weekend proved unfounded," Barclays Capital wrote in a
report.

     During the latest incident, which saw many oil personnel evacuated, oil
production decreased by 58.3% (757,608 b/d) while gas output was down by 25.2%
(1.938 Bcf/d).

     According to the US Minerals Management Service Monday, 19.3% (251,285
b/d) of oil production and 8.8% (676,000 Mcf/d) of natural gas output in the
Gulf remained shut-in.

     The prompt backwardation of the WTI curve continued to come under
pressure as the Brent curve for the front three months is now in contango.

     "The backwardation on crude oil is starting to be under pressure,"
Petromatrix analysts wrote in a report. "The continuation of Iraqi crude oil
exports from the northern route, despite a pipeline attack last week, and
weakening physical premiums are making for a widening of the prompt contango
on Brent."

     The Middle East November Oman futures contract was down 60 cents to
$75.80/b. On ICE, the Dubai futures contract had not attracted any interest so
far in the session.

     ICE gasoil was down, with the October contract at $701.75/mt, down by
$5.50/mt, having dipped below $700/mt for the first time in six trading
sessions. 

     US NYMEX heating oil fell, with the October contract down 104 points to
$2.2209/gallon. NYMEX RBOB traded at $2.0650/gal, 184 points lower. 

--Jean-Luc Amos, jean-luc_amos@platts.com