Futures continued their bull run with new historic highs reached. WTI traded at a historic high of $55.50 and settled at a historic high of $55.17. The market is looking for any new bullish news and on Friday they used the IEA report that China's growth in the 3rd quarter of 9.1% was higher than forecast of 8.9% and so concerns that the Chinese economy will keep soaking up all the spare capacity. There are also concerns over the low US distillate stocks heading into winter (the lowest since 2000). We can also expect increase insurgency in Iraq before the US presidential elections next week. Technically the market has the next objective of $57.00/bbl for WTI and only a settle below $53.30/bbl will break the short term trend. It is hard to believe that at the beginning of September WTI was $42.00/bbl !!!

 

Singapore prices increased marginally ($0.125/bbl) despite the lack of physical activity on the back of an active swaps market where active sellers met active buyers. The physical markets remain quiet due to high prices but supply remains plentiful in the region and the Middle East. The main concern remains on low Japanese kerosene stocks before winter.

 

Closing prices Friday October 22, 2004:

 

WTI                    $55.17/bbl            +$0.70/bbl

Brent                  $51.22/bbl            +$0.50/bbl

IPE gasoil           $492.00/t              +$1.50/t = +$0.20/bbl