07 April 2008 16:13 [Source: ICIS news]
LONDON (ICIS news)--April’s front month gasoil futures rose $29/tonne (€18.5/tonne) on Monday to hit a record high of $1,005.00/tonne at 13:10 GMT on London's ICE, largely on the back of cold weather and high oil prices.
After setting a new record high, prices eased, but stayed above $1,000/tonne and at 14:12 GMT were trading at about $1,004.00/tonne.
The April contract had hit a low of $976.00/tonne earlier in the day before climbing sharply, the rally driven by various factors including comments made by OPEC’s secretary-general Abdullah al-Badri over the weekend saying there was no need to increase oil production levels to curb high crude prices, laying the blame on the weak US dollar and speculative trading.
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The rise in the gasoil futures contract would also prompt upward pressure for middle distillate physical products, such as diesel and jet kerosene and physical gasoil prices would be upgraded as a result.
At the time of writing the market remained backwardated seeing a $20.00/tonne backwardation between April to May contracts.
Backwardation is where the price of a commodity for future delivery is lower than the spot price.
Gasoil last reached a record high of $1,000.50/tonne on 14 March.
($1 = €0.64)
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