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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: steve susko who wrote (19775)	7/9/1999 2:25:00 PM
From: Haim R. Branisteanu	Respond to of 99985

Oil Markets commentary [B] Add1:US Oil Outlook:NYMEX mkt seen choppy; cash crudes to gain By Bridge News New York--Jul 9--NYMEX crude and products futures trading is expected to continue to be choppy next week, with participants remaining mixed about price direction following the past 2 sessions that saw mainly sideways movement. In the cash market, prices for many crude grades could go higher amid perceptions that the availability of rival import barrels may be tightening. * * * NYMEX CRUDE, PRODUCTS Most brokers and traders predict several more sessions of range-bound action. "I think it will be chop city again next week with crude trading around a $19.00-$21.00 range," one trader added. Early next week, participants likely will be focusing on the next round of inventory data from the American Petroleum Institute and the US Department of Energy, following this week's conflicting reports. While the API reported gasoline stockpiles fell 4.403 million barrels last week, helping push Aug crude on Thursday to a 20-month high at $20.15, data from the DOE showed stocks rose 100,000 barrels. Despite data in both reports showing crude inventories unexpectedly fell, the market chose to focus on the DOE's gasoline number and Aug prices immediately took a dive. "Another gasoline build would be a killer to the market," one broker said, although another noted, "Good APIs will give us another blip up on the screen." API releases its data after 1600 ET Tuesday, while the DOE's report is due out after 0900 ET Wednesday. Some brokers and traders also predict that there is still more upside to the market. "It still looks technically strong," a broker said. Shell Nigeria's force majeure today on the remainder of its July crude loadings and the required shutdown of a 47,000-bpd coker unit at Mobil's 240,000-bpd Joliet, Ill., refinery also could lend some strength next week. Mobil Oil today confirmed that the state has ordered the coker shut in the wake of an emission of hydrocarbons and water over the surrounding community beginning Jul 2. (Story .17617) The outage, if prolonged, could significantly tighten East Coast gasoline supplies, industry sources say. Aug crude is expected to test resistance at $19.85 and later at $20.00, while support is seen at $19.30 and $19.15. CASH CRUDE/CFDs A combination of supply factors is expected to lend support to many cash crude grades next week, with the recent rise in prices for physical North Sea Brent and anticipated higher refiner demand ahead of August--a time of peak gasoline consumption--at the top of the list, cash traders said. Specifically, domestic pipeline grade Light Louisiana Sweet and NYMEX-deliverable Colombian Cusiana, both Brent rivals, should go higher, they said. However, imports to the US Gulf from West Africa could ease some tightness in the coming weeks, and much will depend on whether Asia continues to fix Very Large Crude Carriers from West Africa. Some traders say market economics may now be shifting towards making Mideast grades more attractive to Asia, which would open up more West African cargoes for destinations in the US. Latin America high-sulfur crude grades also are expected to continue their price advances next week, benefiting from OPEC's production cutbacks and the anticipated flow of crude to the US Strategic Petroleum Reserve starting Aug 1. Ecuadorean Oriente and Colombian Vasconia, as well as crudes from Venezuela and Argentina, all have gained at least 5-10c within the last 2 weeks. Support for domestic high-sulfurs has been a bit slower in the making; although Eugene Island sour has improved about 5-8c from week-ago levels, trade has been fairly thin. West Texas Sour has stayed fairly range-bound. But those levels could see some gains amid the SPR sale when the market's focus shifts to August barrels later in the month, traders said. Meanwhile, US traders' opinions regarding values next week both for Brent contracts-for-differences, or short-term swaps, and for dated Brent hinge on whether Shell has finished its recent buying spree. If the UK-Dutch oil major still needs a few more cargoes--reportedly up to another 4--prices for both CFDs and physical Brent are expected to continue to firm somewhat from present levels. However, if Shell has exited the market, CFD values could slip as much as 15-20c, and dated Brent cargoes--which were last done at a 45-47c premium to cash forward Aug Brent--could easily fall back into negative territory. More Jul-09-1999 14:21 GMT Source [B] BridgeNews Global Markets Categories: FSN/05850 N/ANL N/ENY N/PET N/REF R/NME R/US COM/ENERGY OV/GEN