Sharekhan Commodities Buzz dated December 14, 2006

Crude oil: Price curve to skew upwards
Oil was back in action following a slew of market moving news including the release of the IEA monthly oil report and DOE's inventory numbers. IEA maintains global oil product demand at 84.5 million barrels/day in 2006 (+1.1% versus 2005) and 85.9 million barrels/day in 2007 (+1.7%). However the report is cautious about the 2007 forecast as it faces downside risks, due to the uncertainties regarding the US economy. The IEA has reduced China's 2006 demand growth rate to 5.6% from 6.2% given the weak demand over the past three months, paving the way for choppy sessions ahead

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