London (Platts)--18Aug2009

Crude futures held on to gains on firmer equity markets and a weaker
dollar Tuesday despite persistently weak fundamentals, market sources said.

At 1011 GMT, the September NYMEX crude contract traded 93 cents higher at
$67.68/barrel, while the October ICE Brent contract gained 67 cents to trade
at $71.21/b.

The dollar, meanwhile, fell against the euro, which traded at $1.4125
compared with $1.4077 late Monday in New York.

"There are huge stocks in oil and demand is still weak," one trading
source said. "But the stock market has recovered slightly and the US dollar is
weaker again so that's given oil a bit of a lift this morning."

One trading source said following the ICE Brent September contract expiry
Friday, a technical gap on the front month standard continuation chart
triggered a drive to trade above Monday's high of $71.44/b.

"If you look at the Brent chart there is a gap from yesterday's high of
$71.44/b and Friday's low of $71.86/b...if we get through this level that will
flip the chart and it will look more supportive," the source said.

"The market has a habit of filling in gaps," the source said in reference
to such technical gaps around expiry dates.

The front month ICE Brent contract had traded only $0.02/b off the low
during morning trade. The fact that this level had not yet been breached was
attributed in part by sources to trader caution on the back of thin liquidity.

Looking ahead, the market was also awaiting US housing starts' statistics
for July, the US July PPI index and the API weekly inventory report.

"Markets should take their cue from macro numbers coming out of the US on
Tuesday, with July building permits and housing starts, (expected around
570,000 units annualized), coupled with producer price readings all slated to
come out," Edward Meir of MF Global said in a report. "On the energy side, we
get API data later in the day."
--Elzbieta Rabalska, elzbieta_rabalska@platts.com