London (Platts)--19Sep2007

Global crude futures continued trading in record territory in European
morning trading ahead of the release of weekly US petroleum inventories data
later Wednesday, after NYMEX front-month crude settled at an all-time high of
$81.51/barrel Tuesday.

     At 10:59 London time (09:59 GMT), front-month November ICE Brent futures
stabilized above $78/barrel, up 51 cents to $78.10/b, after hitting an
intra-day high of $78.40/b in Asian trading. Market-maker October NYMEX WTI,
having climbed to another new all-time high of $82.38/b in late Tuesday
trading, was up 72 cents from the end-of-day settle at $82.23/b.

     November DME Oman passed the $75/b mark, up 28 cents to $75.07/b, while
November ICE Dubai had not changed hands at the time of writing.

     The renewed rally in late Tuesday trading followed the 50 basis point
rate cut to 4.75% by the US Federal Reserve, the first cut since May 2003 and
surpassing widely held expectations of a 25 basis points cut. 

     "The Fed cut came to the high of the expected range and plunged the
Dollar Index to a new record low," Petromatrix analysts said in a report
Wednesday. "Inasmuch as WTI has been lately more of an interest rate
derivative than a commodity derivative the larger cut in interest rate should
continue to bring underlying support to oil futures."

     A London-based trader said: "Yesterday's rally in WTI was due to the
larger-than-expected interest rate cut by the US Federal Reserve... the market
expected a 25 basis point drop, with the 50 basis point drop the market just
went crazy. However, after the US stats today, I think we could see some
profit taking," he added.

     Despite the current bullish sentiment, market players seem to be watching
developments today very closely, with US weekly stats releases typically
triggering selling or buying sprees.

     "The US Fed move seemed to be the main reason for the rally in WTI and
product futures. However, I don't understand the logic behind the move. To me
this seems too far, but it would need a brave man to go short," another
London-based broker said. He added that ICE Brent may get a chance to close
the gap to WTI after the latter's expiry on Friday.

     Analysts surveyed by Platts Tuesday were bullish ahead of the release of
US petroleum inventory data by the Energy Information Administration and the
American Petroleum Institute. 

     They expect oil stocks to drop 1.75 million barrels, with refinery runs
seen down 1 percentage point to 89.5%, affected by Hurricane Humberto which
idled three refineries in Port Arthur, Texas and closed the Houston Ship
Channel for about 24 hours. 

     Distillates stocks are expected to have built by 1.3 million barrels, in
line with seasonal tendencies, while gasoline stocks are forecast to have
dropped 1.5 million barrels.

     Product futures followed crude futures higher on Wednesday, with new
record highs seen late Tuesday and early Wednesday for NYMEX heating oil and
ICE gasoil.

     At 10:59 London time, October ICE gasoil was up $8.75 to $706.25/mt,
after hitting $710/mt for the first time ever in earlier trading. October
NYMEX heating oil was up 0.61 cents to $2.2484/gallon, slightly retreating
from the new record high of $2.262/gal seen late Tuesday and again in
Wednesday trading. October NYMEX RBOB futures rose as well, up 1.62 cents to
$2.0765/gal.

--Verena Peternell, verena_peternell@platts.com