tekkmortal
Active Member
- Joined
- Nov 27, 2003
- Messages
- 1,534
- Reaction score
- 0
Oil prices slide after Iraq handover
Mark Tran
Tuesday June 29, 2004
World oil prices dropped to their lowest level in more than two months today after the surprise handover of power to an Iraqi interim government.
In early trade, US light crude fell 44 cents, to $35.65 (£19.59), a barrel - the lowest price since April 21 - before rising to $35.80. London's Brent crude stood 38 cents lower, at $33.32 a barrel.
Renewed production in Norway after a strike and increased exports from Iraq helped to drive prices down, dealers said. The US transferred power to an interim Iraqi government at a secret ceremony two days earlier than expected, to thwart attacks.
"The early handover is reducing fears of terrorist disruptions to oil supplies - fears that had added at least several dollars to prices," David Thurtell, a commodity strategist with the Commonweath Bank of Australia, told Reuters.
Until two weeks ago, Iraq had been exporting an average of 1.7m to 1.9m barrels a day, compared with somewhere between 2m and 2.2m before the US invasion. The Iraqi prime minister, Ayad Allawi, has said attacks on oil pipelines have cost the country $200m.
Despite the impact of a transfer of power in Baghdad, analysts warned that Iraq remained a "short-term wild card". PFC Energy, a consulting firm, said in a report: "If the situation in Iraq does worsen substantially, exports could be curtailed far more than has occurred to date and prices could spike over $40 again."
Oil prices started coming off the boil at the start of June when Opec, the oil cartel, agreed to raise its output limit by 2m barrels a day from July 1. It also agreed to lift curbs by another 500,000 barrels from August 1 of this year.
Claude Mandil, executive director of the International Energy Agency, yesterday expressed confidence that less vigorous economic growth in China was easing the market. He also said Opec's decision to raise its output ceiling and a subsequent increase in actual production had shown that the cartel could be counted on to help to stabilise prices.
"The market now understands that they are reliable. Prices are declining but are still very, very high," Mr Mandil said, adding that the risk of disruptions through sabotage remained.
Before Opec agreed to boost output, oil prices hit a 21-year high of over $42 a barrel, sparking fears that high oil prices would derail global economic recovery.
Now I can buy cheap gas again!
Mark Tran
Tuesday June 29, 2004
World oil prices dropped to their lowest level in more than two months today after the surprise handover of power to an Iraqi interim government.
In early trade, US light crude fell 44 cents, to $35.65 (£19.59), a barrel - the lowest price since April 21 - before rising to $35.80. London's Brent crude stood 38 cents lower, at $33.32 a barrel.
Renewed production in Norway after a strike and increased exports from Iraq helped to drive prices down, dealers said. The US transferred power to an interim Iraqi government at a secret ceremony two days earlier than expected, to thwart attacks.
"The early handover is reducing fears of terrorist disruptions to oil supplies - fears that had added at least several dollars to prices," David Thurtell, a commodity strategist with the Commonweath Bank of Australia, told Reuters.
Until two weeks ago, Iraq had been exporting an average of 1.7m to 1.9m barrels a day, compared with somewhere between 2m and 2.2m before the US invasion. The Iraqi prime minister, Ayad Allawi, has said attacks on oil pipelines have cost the country $200m.
Despite the impact of a transfer of power in Baghdad, analysts warned that Iraq remained a "short-term wild card". PFC Energy, a consulting firm, said in a report: "If the situation in Iraq does worsen substantially, exports could be curtailed far more than has occurred to date and prices could spike over $40 again."
Oil prices started coming off the boil at the start of June when Opec, the oil cartel, agreed to raise its output limit by 2m barrels a day from July 1. It also agreed to lift curbs by another 500,000 barrels from August 1 of this year.
Claude Mandil, executive director of the International Energy Agency, yesterday expressed confidence that less vigorous economic growth in China was easing the market. He also said Opec's decision to raise its output ceiling and a subsequent increase in actual production had shown that the cartel could be counted on to help to stabilise prices.
"The market now understands that they are reliable. Prices are declining but are still very, very high," Mr Mandil said, adding that the risk of disruptions through sabotage remained.
Before Opec agreed to boost output, oil prices hit a 21-year high of over $42 a barrel, sparking fears that high oil prices would derail global economic recovery.
Now I can buy cheap gas again!
