London (Platts)--16Sep2008

Downward momentum from Monday's aggressive selloff spilled over into
Tuesday's trading session, with NYMEX light sweet and ICE Brent both trading
down over $3/barrel before recovering slightly.

At 0922 GMT, the new front-month November contract traded at $91.49/b,
down $2.75/b, having earlier hit an intra-day low of $89.90/b. It was the
first time Brent has traded under $90/b since February 8.
The October NYMEX light sweet crude contract traded at $93.11/b, down
$2.60/b, off a low of $91.54/b.

"Yesterday's decline was mainly about taking off some of the [Hurricane]
Ike premium," Olivier Jakob at Petromatrix said in a daily report. "Gasoline
was the leading weight on the oil complex while the rest of the commodity
spectrum did not show signs of across the board selling".

"However, with the continued fall in equities and commodities not playing
a diversification role anymore we do believe that the risk of margin call
selling is still there, especially since credit lines have turned again harder
to get."

There was a plethora of headlines Tuesday, including further negative
news from financial markets with the potential to impact oil commodities.

The European Central Bank injected a second tranche of funds into money
markets releasing a further Eur70 billion ($99.8 billion), the second such
action in two days, AFP reported.

The Bank of England also injected GBP20 billion (Eur25.2 billion, $35.9
billion) into money markets, four times the amount it had offered Monday after
the collapse of US investment bank Lehman Brothers, the news agency reported.
Focus also centered on the prospects of US insurance giant American
International Group, which was struggling to find additional funds to fulfill
its insurance obligations.

The three main rating agencies--Standard & Poor's, Moody's and
Fitch--lowered AIG's credit score late Monday, as the company fought to stay
afloat, AFP reported.

According to US media reports, among the assets AIG is hoping to sell is
its aircraft leasing business, International Lease Finance Corporation, which
has a fleet of 1,000 planes, AFP said.

There was further strength in the US dollar, and the US Federal Reserve
meeting later Tuesday will be keenly observed for any signs of a change in
interest rates.

The ICE Dollar Index firmed to 78.856 points, down slightly from Monday's
close, but well up from Tuesday's open.

In products markets, the October NYMEX heating oil contract was down 4.57
cents at $2.7455/gallon and the October RBOB contract was at $2.5025/gal, down
5.89 cents.

The ICE gasoil contract was at $891.25/mt, down $7.75 and showing some
strength in the curve as imports to Europe fall and the front months flip into
backwardation.
--Paul Hailey, paul_hailey@platts.com