Daily Oil Market Comment

Crude oil futures fell and distillate futures firmed overnight. Crude prices fell on profit taking following Wednesday nights rally as well as exiting ahead of the December WTI contract expiry tonight. Distillate futures firmed on the back of short covering with prices still rising due to low stocks in Europe and USA. The Funds had been short distillate futures and have been exiting. Technically the crude market remains in a downtrend.

Singapore prices rallied $1.88/bbl yesterday in line with the futures market at the time. Trading company Hin leong returned to the physical buyers market but both gasoil and kerosene remain well offered. Other than Hin Leong, there is little buying interest. Singapore prices could move in either price direction from down $0.50/bbl if they follow crude or up $0.30/bbl if they follow gasoil futures.

Closing Prices Thursday November 18, 2004:

WTI (Dec) $46.22/bbl -$0.62/bbl (Contract expires tonight)

WTI (Jan) $46.38/bbl -$0.74/bbl

Brent (Jan) $42.72/bbl -$0.04/bbl

IPE Gasoil $436.00/t +$17.00/t = +$2.28/bbl

Asian Day Market Movement

Oil prices continued to firm following last nights rally on concerns that distillate stocks are too low heading into winter. Technically the market remains in downtrend but it looks like sentiment is getting bullish again so prices are expected to test higher .

Singapore prices were higher following futures rises but the increase was limited by swaps selling. Gasoil futures have risen $3.15/bbl since yesterday whilst Singapore gasoil swaps have risen only $2.25/bbl. Trader Hin Leong came back to the market and bought 2 gasoil cargoes and one kerosene cargo but kerosene was more aggressively offered with bigger discounts.

Prices As At 5:30pm Singapore Time, Thursday November 18, 2004:

WTI (Dec) $47.00/bbl +$0.16/bbl

WTI (Jan) $47.29/bbl +$0.17/bbl

Brent (Jan) $42.93/bbl +$0.17/bbl

IPE Gasoil $429.00/t +$10.00/t = +$1.34/bbl

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