London (Platts)--12Aug2008

Global crude futures fell to fresh 15-week lows Tuesday, on the back of
economic-growth concerns and strength in the US dollar, sources said.

At 10:41 GMT, the September ICE Brent contract traded at $111.56/barrel,
down $1.11 from the overnight settle, after falling as low as $110.47/b
earlier in the session. The September NYMEX contract lost $1.07 to $113.38/b.

"The macro inputs continue to prevail over micro inputs in the oil
markets. The [ICE] Dollar Index continued to strengthen and pressured the main
dollar commodities (oil and metals)," Petromatrix oil analysts said in a
report.

The ICE Dollar Index reached a new six-month high at 76.616 in early
European trading. Against the euro it firmed to $1.4812, up 7.6% in the last
month.

The decline in prices comes against the backdrop of the Georgia-Russia
conflict and last week's pipeline explosion on the 1 million b/d
Baku-Tbilisi-Ceyhan crude pipeline in Turkey, which resulted in a fire that
was finally put out Monday.

"Bullish news is being ignored and bearish news being latched onto," a
London-based broker said.

"Given how poorly the markets reacted to the initial reports of fighting,
we suspect that prices could sell off yet again if a cease-fire is, in fact,
announced," MF Global said in a report.

Russian President Dmitry Medvedev told defense chiefs on Tuesday he had
decided to cease Russia's military operation against Georgia, according to a
report by the AFP.

"I have taken the decision to end the operation to force Georgian
authorities into peace," Medvedev said at a televised meeting.

Meanwhile, despite reports that the fire on the BTC pipeline has been
extinguished, it was still too hot to examine as of Monday night, a spokesman
for BP in Turkey said early Tuesday. The company said it would be re-assessed
today to see if repairs could begin.

In addition, the IEA monthly report released early Tuesday was "neutral
to slightly bearish," a trader said.

"On the demand side, the slowdown in demand related to the general
economic downturn and high oil prices is becoming increasingly evident--at
least in the OECD and predominantly in the US," the IEA report said.

"With the [call on OPEC crude] in 2009 lower than actual OPEC production,
the IEA has been forced to change its tone and has moved from the peak oil
rhetoric it was using during 2007 to a rhetoric of easing of fundamentals.
That impact of that change on the macro players and passive investors should
not be underestimated," Petromatrix added.

Technically, "we might see strong buying if we dip to the $109-$110/b
level on WTI," a London-based trader said.

"There could be some profit taking ahead of Wednesday's [US] EIA
numbers," a broker added.

In products markets, August ICE gasoil fell 4.25/mt to $1,014.50/mt.
"Gasoil continues to look really weak. Inventories are stabilizing across
the world," a London-based trader said.

"The excess in Asia and the US will arrive in Europe at greater speed if
Europe continues to price this way and I expect the gasoil crack to fall
another $4-$5 to $20," a trader said.

In products markets, the September NYMEX heating oil and gasoline
contracts traded at $3.1085/gal and $2.8466/gal, respectively, down 1.1
cents/gal and 2 cents/gal.
--Brian Murphy, brian_a_murphy@platts.com