New York (Platts)--18Sep2007

NYMEX's October crude futures on the Chicago Mercantile Exchange's Globex
system were 24 cents higher at $80.83/barrel Tuesday after having posted an
all-time high of $81.24/b in Asian trading.

      Tuesday's gains were an extension of Monday's rally with the October
option expiration accelerating the buying. Those who had sold calls at the
$80.00/b and ultimately the $80.50/b were forced to buy futures to prevent
themselves from getting shorter as prices moved higher.

     Supply/demand balances continue to provide the underpinning for higher
petroleum prices, but fresh bullish news was lacking Monday. If anything, a
couple of refinery restarts had the potential to act as a bearish influence on
product prices, but the move up in crude oil overshadowed any other
development.

      Next up is today's rate announcement from the Federal Reserve Bank. Most
market participants believe a 25-basis point rate cut in the key inter-bank
lending rate is a done deal.

      "In our view, given tight market fundamentals, market participants are
not likely to want to hold short positions ahead of the Fed's meeting today,"
Kevin Norrish, energy analyst at Barclays Capital, said in a report. "However,
should the expected rate cut come in at 25 basis points rather than the 50
basis points some are hoping for then that may serve to lessen positive impact
on market growth expectations."

--Linda Rafield, linda_rafield@platts.com