Crude down slightly after stock build

Crude down slightly after stock build, Bush win

New York (Platts)--3Nov2004


Benchmark crude futures were showing slight declines just after 12 p.m. EST
(1700 GMT) Wednesday, having recovered from intra-day lows following a
larger-than-expected build in US crude stocks. December WTI on the New York
Mercantile Exchange was trading at $49.38/bbl, down 24 cts, while front- month
Brent on London's International Petroleum Exchange was 45 cts lower at
$46.10/bbl. NYMEX's new Brent contract was at $46.30/bbl, down 30 cts, in
Dublin trade. Crude showed strength early, as the apparent victory of George
W. Bush in the US presidential election lent support and pushed NYMEX to an
intra-day high of $50/bbl. Analysts said a Bush victory was widely seen as
bullish for the market, in part because he is less likely to tap the Strategic
Petroleum Reserve to cool prices. Still, politics took a backseat to weekly
government stock data at 10:30 a.m. EST (1530 GMT), when the Department of
Energy reported 6.3-mil bbl build in crude stocks; expectations were for
1.8-mil bbl. The American Petroleum Institute put the increase at 7.8-mil bbl.

Prices reacted quickly, with NYMEX and IPE Brent tumbling more than $1/bbl on
the data before recovering. NYMEX unleaded gasoline and heating oil were down
only marginally at noon Wednesday. The production picture in the Gulf of
Mexico continued to improve, with the latest report Tuesday from the US
Minerals Management Service indicating crude output was just under 1.5-mil
b/d, or about 87% of normal. On the international front, markets seemed
unconcerned, at least for now, about this week's attacks on oil pipelines in
northern Iraq. Insurgents on Tuesday attacked the country's major pipeline
network connecting wells west of Kirkuk with the main export pipeline and the
main refinery in Baiji. The attacks are expected to slow the movement of crude
north along the main export pipeline to Turkey, but are expected to have
little impact on Iraq meeting its term contract commitments if repairs are
finished quickly.

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