London (Platts)--12May2009

Global crude futures continued their advance Tuesday, pulled higher by
the weakness of the US dollar and bullish technical signs on expectations
that the world economy could be braced for a recovery, sources said.

"Technically, the market is bullish. Each drop [in crude prices] is seen
as an opportunity to re-enter the market," said a crude trader.

By 1020 GMT, light, sweet NYMEX West Texas Intermediate crude for June
delivery traded 66 cents higher on the day at $59.16/barrel, having earlier
reached $59.68/b, its highest level in nearly six months.

The ICE Brent crude front-month stood 56 cents higher at $58.04/b. The
contract had earlier touched $58.44/b, its highest trade level since November
10 2008.

The ICE US dollar index fell 0.42 points to 82.39, lingering at its
lowest level since early January. Asian and European equities markets eked out
only marginal gains after the Dow Jones Industrial Average had closed 1.8%
lower at 8,419 points.

"Compared to what we believed in our most recent update at the end of
March...investor appetite for riskier asset classes (including commodities,
stocks, bonds, and emerging markets) seems less temporary, better entrenched,
and more sustainable," analyst Michael Wittner and Remy Penin at Societe
General said in a research note.

"Recent price strength is not based on fundamentals, but on financial
flows," they added, pointing to various indicators showing a slowdown in the
rate of economic contraction, which they said had fuelled optimism. Societe
General reiterated its price forecast for Brent for Q3 at $55/b and for Q4 at
$60/b.

"In our view, commodities can continue to price the more positive forward
outlook, that suggests that sequential growth will resume at the end of this
quarter, despite weak current fundamentals as long as inventories can continue
to build," analysts at Goldman Sachs said in a note.

"This is because storage bridges the gap between current weakness and
future strength until underlying fundamentals improve...there is a race
between filling storage capacity and the resumption of growth." The investment
bank predicts WTI rise to to $65/b by the year-end.

Additionally, a crude futures trader pointed to improving refinery
margins, which helped boost crude runs. "The runs look better in the US," he
said, adding this was partly a result of improved margins and the end of
maintenance projects.

Product margins mirrored the strength of the underlying crude benchmarks.
The expiring ICE gasoil May future was $7.75/mt higher at $483.25/mt, while
NYMEX June heating oil futures added 1.1 cents to $1.51/gal and RBOB
front-month futures firmed 0.4 cents to $1.68/gal.