NEWS / Foreign Exchange

Crude Market Update

The standoff over 15 captured British sailors shows no signs of abating. The consensus is that Iran appears dug in for a prolonged standoff. The British government said on Sunday that it was in direct contact with Iran, cited as the reason for the minor profit-taking seen during Asian trading. British officials said that they were examining options for new dialogue over the crew of 15 sailors and marines seized by Iran over a week ago. Iran's state-run radio said it sees "positive changes" in Britain's negotiating stance, and said because of those, television stations wouldn't broadcast any additional videos of U.K. sailors' confessions

- Oil prices were also weighed down by news that French port workers voted to end a 17-day old strike at the Fos-Lavera oil terminal near Marseille that has 63 vessels stranded. The strike was ended much sooner than expected (on Friday a union leader weas quoted as saying that the strike was far from over)

- A British oil worker was kidnapped in Nigeria on Sunday. Analysts expect more kidnappings and escalating violence in Nigeria ahead of the elections this month.

- In other Nymex trading, heating oil futures for May delivery lost 0.79 cents to $1.8690 a gallon (3.8 liters) while natural gas prices fell a cent to $7.720 per 1,000 cubic feet

- Key levels to watch on Nymex crude (May contract): $65 is the high on 3/28/07 and 3/29/07. Break below $65 will then see a likely test of support around $63.75 (high on 3/01/07 and 3/08/07, low on 3/29/07). The Easter break is sure to prompt an erring on the side of caution - the market will want to remain long until a resolution in the UK-Iran