•Global crude futures extended Thursday's losses on Friday on the back of a strong US dollar and a dramatic weakening in the distillates futures complex ahead of the NYMEX heating oil expiry at the end of trading today.

•In addition, the stronger US dollar and efforts of the US CFTC to increase transparency in commodity trading may reduce incentives to increase positions in oil futures, analysts said, resulting in NYMEX light sweet crude dropping below the $125/barrel mark in earlier trading.

•However, despite crude futures being lower, distillates were the real losers of the last two days, with June ICE gasoil down $50 to $1,178.50/mt, after slumping to $1,174.50/mt in intra-day trading. "The heating oil crack at $36 a barrel is too much," one market source said. "Time for a reality check." Analysts from Petromatrix added that "the rebound of the Dollar Index is not providing any short-term supportive sentiment and the expiry of the products today will be a key driver."

Updated: May 30, 2008