IPE Brent rises on slower than expected US output recovery

London (Platts)--9Sep2005

IPE Brent rose in early Friday trading as US Gulf of Mexico production
resumed slower than expected after Hurricane Katrina.

      At 0939 GMT the front-month futures contract was up 50cts to $63.58/bbl,
with the IPE Gasoil futures up $3 to $596.25/mt.

     The inter-month spreads also widened by 17cts, to -58cts, from the
overnight settlements. "The Brent futures are up on the back of the refinery
news from the US, but the market looks a technical good buy and there is a
good amount of action on the Oct/Nov spread," one broker said.

     Shell Friday said its current production in the Gulf of Mexico was about
160,000 boe/d but said that only 60% its pre-Hurricane Katrina 450,000 b/d
output was expected to be on line by the fourth quarter of the year.
     The US Department of Energy's (DoE) weekly inventory report reported
6.4-mil bbl draw in crude stocks, slightly lower than the anticipated 7-mil
bbl draw. 

     Gasoline stocks fell 4.3-mil bbl, signficantly less than an expected
6.2-mil bbl  fall and distillate dropped 800,000 bbl, lower than the 2.5-mil
bbl draw forecasted by analysts.

     DoE said the refineries expected to be down for "an extended period"
include the ExxonMobil/PDVSA joint-venture 187,000 b/d refinery in Chalmette,
Louisiana, ConocoPhillips' 250,000 b/d Alliance plant in Belle Chasse,
Louisiana, Murphy Oil's 125,000 b/d plant in Meraux, Louisiana, and Chevron's
325,000 b/d refinery in Pascagoula, Mississippi. Also still shut is Motiva
Enterprise's 240,000 b/d refinery in Norco.

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