London (Platts)--27Jan2009

Global crude futures were stable to slightly stronger in European morning
trading on Tuesday as short-term demand due to colder weather and some
technical buying supported prices, sources said.

A late downturn in US equity markets on Monday, despite some good US
macroeconomic data, spilled into the petroleum complex, sending ICE Brent and
NYMEX crude futures into the red for the close after what had been a promising
day with intra-day highs just shy of $50/barrel.

By Tuesday at 1041 GMT, however, the March ICE Brent futures contract was
trading 16 cents higher at $47.12/b, after climbing as high as $48.40/b in
Asian trading. At the same time the front-month NYMEX crude contract was up by
50 cents at $46.23/b, narrowing Brent's premium above NYMEX crude to less than
90 cents/b.

"I think the cold weather has taken us to the high $40s on crude. I think
that unless US stats are particularly bullish, crude will remain below $50/b,"
one London-based crude broker said.

"It seemed that prices had gotten ahead of themselves as well on Monday,
particularly in the crude complex, where values neared the key resistance band
of $50-$52 basis both crude contracts," energy analyst Ed Meir for MF Global
said in a report on Tuesday.

Crude futures have traded within a $40-$50/b range since the start of the
year.

"I think we will see only technical trading. Fundamental themes remain
the same...Low demand. However, it is hard to see crude falling much below
$40/b," the London-based broker added.

Another support factor often cited is OPEC's implementation of the
reduced production levels the producer's group agreed in a series of meetings
late last year, amounting to an accumulated cut of 4.2 million b/d.

However, some market players doubt that the OPEC effect will really
induce a substantial upward move in crude futures.

"OPEC realistically is powerless in the face of falling demand. It can
only control supply. I think they can possibly persuade the market to some
extent, but the medium- to long-term view remains unchanged," the broker said.

Product futures were mixed in European morning trading, with February ICE
gasoil down by $5.50 to $450.50/mt, catching up with the late-Monday sell off.

February NYMEX heating oil futures were up by 1.27 cents to $1.4397/gal,
while the front-month NYMEX RBOB contract was up 1.66 cents to $1.1697/gal.

A new cold spell in the North Atlantic Basin may lend support to
distillates futures in the short-term.
--Verena Peternell, verena_peternell@platts.com