Crude futures fall on mild weather despite Nigerian attack

London (Platts)--21Dec2006

Global crude futures fell Thursday despite a strong draw of 6.3 million
barrels in US crude stocks. Bearish sentiment due to the ongoing
mild weather in the US and northwest Europe, shown by increasing heating oil
stocks in the US, was weighing heavily on crude futures.
"The mild weather in the US is really sapping the appetite of the bulls,"
a London-based trader said. "I have the impression that many players would be
happy to go home flat over the weekend as trading activity is very low - it is
like flogging a dead horse," the trader added.
At 1042 GMT the February ICE Brent futures contract changed hands at
$62.95/barrel down 28 cents. The February WTI futures contracts on NYMEX and
ICE performed similarly, decreasing by 27 cents to $63.45/barrel.
Over the last couple of days market participants were repeatedly heard
saying that there is severe lack of liquidity in the market ahead of the
holiday season, which is "killing the trade." And the current ongoing mild
weather in the Atlantic and especially the key consuming regions for heating
oil in the US is likely to further drag down sentiment although some forecasts
expect temperatures to drop to normal seasonal levels after the holiday.
"There is a lack of bullish news. OPEC tried to talk the market up but it
does not work. It seems as if nobody really believes that the cuts will
actually happen," a trader said.
Traders wre also keeping an eye on Nigeria after militants killed three
policemen during a raid on a residential camp for workers at Total's Obagi oil
facility in River state of the Niger Delta. Production of about 40,000 boe/d
has not been affected.
Product prices, meanwhile, were also down on, with ICE Gasoil futures for
January delivery seen down by $4.75/mt to $544/mt. January NYMEX heating oil
futures declined by 0.45 cents to $1.725/gallon, while January RBOB futures
were weaker by 0.5 cents at $1.688/gallon.
--Verena Peternell, verena_peternell@platts.com

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