IPE Brent futures drifts lower on weak heating oil demand

London (Platts)--30Nov2005

IPE Brent futures slipped lower Wednesday on expectations US DOE
commercial stocks data will show a rise in distillates and gasoline
stocks and on milder-than-normal weather in the northeastern US.
     At 1132 GMT the front-month January Brent benchmark changed hands at
$54.08/bbl, 24 cts beneath Tuesday settle, close to the opening level.  
     Warmer weather across US Northeast, the world's largest heating oil
market, has slowed heating oil demand, said one London-based broker. US
heating oil has been leading the whole energy complex lower, sources said. 
     "With the energy complex under downtrend pressure, Brent is
expected to test lower numbers later on in the day," one broker said. "We
might see crude oil falling to around $50/bbl in a week or two time," the
source added. Technical analyses pegged support at $54/bbl.
     US Department of Energy crude stocks data due out at 1530 GMT are
expected to show a decline of 1.7-mil bbl, according to a Platts poll.
Analysts were projecting a build in gasoline stocks of 1.6-mil bbl. Gasoline
stocks have climbed 7.61-mil bbl over the past six weeks as refiners have kept
yields at hefty levels.
     Distillate stocks were expected to show a 1.3-mil bbl build, with
production seen likely to increase further toward the 4-mil b/d level, even
while imports may have rebounded to as much as 500,000 b/d.
     Elsewhere, gasoil futures fell in early trading Wednesday with the
front-month December contract down $1.25/mt at $495.55/mt.

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