London (Platts)--4Jun2008

Global crude futures continued to fall in European morning trading
Wednesday, extending Tuesday's losses following a rebound in the US dollar and
coming close to the $123/barrel mark for the first time since mid-May.

With little supportive news around for the oil complex, market players
are turning their attention to the release of the weekly US petroleum stock
data later on today by the Energy Information Administration and the American
Petroleum Institute.

With forecasts painting a bearish picture for stock developments, a crude
price upswing appears unlikely, sources said.

At 0959 GMT, the July ICE Brent futures contract was trading $1.08 lower
at $123.50/b, while front-month NYMEX light sweet crude futures were 64 cents
lower at $123.67/b, with the contango structure at the front steepening to
minus 75 cents for Brent and minus 37 cents for NYMEX crude.

"Technically, the whole petroleum futures complex is looking terrible and
[US Federal Reserve chairman Ben] Bernanke's comments yesterday did not help
crude prices either by trying to support the US dollar," one London-based
broker said.

"It is easy to talk the dollar up but in reality the Fed actually needs
to do something about the inflation risk... no measures where suggested. There
is not much that can be done. Raise interest rates again in the current
climate? I doubt it," the broker added.

On Tuesday, comments by Bernanke regarding the dollar's valuation sparked
a steep rally in the currency and a drop in commodities prices. Although the
dollar lost ground in late-Tuesday trading crude prices continued to fall,
reflecting current bearish technicals.

In addition, there are signs of a slowdown in demand from top consuming
regions in Asia. The Indian government Wednesday announced it will increase
gasoil and gasoline prices by around 10% and LPG prices by around 17% in
response to pleas from state-owned oil companies, which have been suffering
massive losses from having to sell oil products at artificially low
government-set prices.

"The market focus is currently more on the inflows of demand destruction
news. India is the latest country to be added to the list of emerging
countries reducing oil subsidies, [automobile manufacturer] GM like Ford is
shutting down production capacity, airline associations are ringing alarm
bells etc," analysts for Petromatrix said in a report on Wednesday.

Turning attention to the weekly US stocks data, analysts surveyed by
Platts were expecting a 2.7 million barrel build in US crude stocks, while
gasoline inventories are seen up by 900,000 barrels and distillates by 1.6
million barrels.

Product futures were lower as well on Wednesday, with June ICE gasoil
down $17.25 to $1,164.75/mt, while July NYMEX heating oil lost 0.92 cents to
$3.6304/gallon.
July NYMEX RBOB was down 0.46 cents to $3.3479/gal.
--Verena Peternell, verena_peternell@platts.com