NewsFlashCrude futures trade above $101/bbl

27 February 2008 06:23  [Source: ICIS news]

SINGAPORE (ICIS news)--US crude futures prices were trading above $101/bbl (€67.67/bbl) on Wednesday in Asia, after both NYMEX light sweet crude and Brent futures hit new record highs amid weakness in the US dollar and cold weather in the US and Europe.

At 05:28 GMT on Wednesday, April NYMEX light sweet crude futures were trading at $101.15/bbl, up $0.27/bbl on Tuesday’s settlement price.  In post settlement trade late in Tuesday’s session, it hit a record of $101.43/bbl after earlier settling at a new record level of $100.88/bbl

Meanwhile, April ICE Brent futures were trading at $99.66/bbl, up $0.19/bbl on Tuesday’s close. Late in Tuesday’ trading session, it also hit a new record high of $100.03/bbl, before settling at $99.47/bbl.

The US dollar fell to new lows against the Euro and other currencies on Tuesday amid further worries over the US economy and the potential for additional Federal Reserve interest rate cuts.

The weakness in the US dollar attracted additional speculative funds into the energy markets as a hedge against inflation. Further upward pressure was generated by colder winter weather in the US northeast and Europe which strengthened the heating fuels markets for gasoil and natural gas.

Expectations that OPEC will not raise output at its upcoming meeting on 5 March, was an additional bullish factor.

Crude prices were also supported by the ongoing Turkish military incursion into northern Iraq and rising geopolitical tensions between Iran and the West over Tehran’s nuclear programme and plans for further UN sanctions.

Meanwhile, worries also persist over Venezuelan and Nigerian supplies.

Attention will be focussed US weekly data, due out later on Wednesday, which is expected to reveal a build of around 2.5m bbls in crude stocks. This would be the seventh consecutive week in which crude stocks have risen.

Gasoline stocks were expected to rise by around 300,000 bbls. However, distillate stocks were forecast to decline for a third straight week by around 2.1m bbls.

($1 = €0.67)

By: James Dennis
+65 6780 4359

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