IPE Brent tumbles as hurricane oil threat eases

London (Platts)--24Oct2005

Brent crude futures on London's International Petroleum Exchange fell
sharply early Monday heading close to the key support area of $57/bbl as the
threat from Hurricane Wilma to the US Gulf oil installations appeared to ease
despite still being a category 3 hurricane. "Its the apres Wilma effect," one
broker with Mann Financial said. 
     Several players appeared to buy into the market late on Friday, but sold
off those positions early Monday, brokers pointed out. The key support level
for Brent was cited at $57.05/bbl,  but brokers said that if this level was
broken then prices would head lower to around $55.65/bbl. The gasoil futures
market was more bullish with long term meteorological reports suggesting a
colder than normal winter. If this happens then heating oil stock levels could
be severely tested, brokers have cautioned. 
     November IPE gasoil futures were trading up 75cts from Friday's
settlement at $556.50/mt. Gasoil futures have tumbled $105 since prices hit an
all-time high of $661.75/mt on September 1. 
     Friday's Committment of Traders report showed that non-commercials
comprised mainly of the hedge funds were holding a net long position in crude
oil. but have shifed to a short position on unleaded and heating oil. However
both positions are relatively short, a possible sign that traders are waiting
to see how the supply/demand situation will alter over the coming weeks.

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