London (Platts)--10Oct2008

Global oil futures were lower again in the European morning Friday,
trading down to around one-year lows led by a massive selloff in gasoil
futures and the spillover effect of turmoil in financial markets.

Both the front-month ICE and NYMEX crude futures and the ICE gasoil
contract traded at 12-month lows during Asian hours.

At 1018 GMT, ICE front-month Brent crude had rebounded slightly to trade
$3.75 down from Thursday's settle at $78.91/barrel, while the ICE October
gasoil was down $44.00 at $744.50/mt ahead of the contract's expiry.

NYMEX front-month crude was $4.02 lower at $82.57/b.

While trading was relatively subdued, weak equity markets continued to
put pressure on commodities trading.

"The extent of the selloff in equities will bring in more margin calls
and this will lead to selling abroad asset classes, including commodities,"
Olivier Jakob, analyst at Petromatrix, said in a report.

While the bearish market sentiment was also supported by weak demand
fundamentally, energy futures were largely reacting to global financial
markets turmoil.

The EIA Wednesday reported US gasoline stocks were up 7.2 million barrels
on the week, significantly higher than the 2 million barrel build expected by
analysts, and a nominal draw of 500,000 barrels for heating oil stocks.

With overall product demand falling by 8.6% year on year over the last
four weeks, both NYMEX RBOB and heating oil contracts were extremely weak.

In addition to EIA's stocks report reflecting demand destruction in
physical markets, long-term demand projections for oil were bleak.

The International Energy Agency Friday slashed its estimates of world oil
demand in the second half of 2008 and in 2009 as a result of the ongoing
financial crisis.
--Funda Saygin, funda_saygin@platts.com