Oil Prices Tumble Further
After Strikes on Iraq Begin
Associated Press
LONDON -- Oil prices tumbled in early trading Thursday after the U.S. launched air attacks on Baghdad.
Futures contracts in New York fell by as much as $1.88 a barrel before recouping much of their initial losses.
The Organization of Petroleum Exporting Countries sought to calm oil markets by announcing that its members have pledged to maximize production to make up for any disruption in crude exports from Iraq.
"I am herewith reiterating OPEC's resolve to make up for any supply shortfall resulting from developing events. To this end, member countries have pledged to use, in the interim, their available excess capacities to ensure continued supply," OPEC's president Abdullah bin Hamad Al-Attiyah said.
Iraqi crude exports, totaling two million barrels a day, are expected to cease as the war intensifies.
April contracts of U.S. light, sweet crude fell to a low of $28.00 a barrel in after-hours trading before rebounding somewhat to $29.19, down 69 cents from Wednesday's close.
"It dropped like a stone," said Peter Gignoux, head of the petroleum desk at Salomon Smith Barney.
In London, May contracts of North Sea Brent crude fell to $25.53, down $1.22 a barrel. Brent bounced back, trading 30 cents lower at $26.45 by midday. Some traders anticipated firmer Brent prices on concerns that the war with Iraq might take longer than many had predicted.
However, Mr. Gignoux said he believed the so-called war premium built into prices had yet to fully disappear. Many analysts argued before the start of hostilities that fears of a disruption in Iraqi oil supplies had added more than $5 to the price of each barrel.
"The market doesn't look particularly strong at this juncture," he said.
Over the past three weeks, prices for U.S. light, sweet crude have fallen from their post-Gulf War high of $39.99 a barrel, reached on Feb. 27.
OPEC officials have indicated often in recent weeks that the group would pump more oil if necessary to ensure ample supplies. Its statement Thursday was an explicit commitment to do so. "While OPEC will continue to closely monitor and react to market developments, it is hoped that the measures taken will contribute to market stability and support world economic recovery," Mr. Attiyah said.
In light of the hostilities in Iraq, OPEC announced that its Secretary-General Alvaro Silva would hold a news conference at the group's headquarters in Vienna, Austria, at 1500 GMT.
Copyright (c) 2003 The Associated Press
Updated March 20, 2003 7:35 a.m.
After Strikes on Iraq Begin
Associated Press
LONDON -- Oil prices tumbled in early trading Thursday after the U.S. launched air attacks on Baghdad.
Futures contracts in New York fell by as much as $1.88 a barrel before recouping much of their initial losses.
The Organization of Petroleum Exporting Countries sought to calm oil markets by announcing that its members have pledged to maximize production to make up for any disruption in crude exports from Iraq.
"I am herewith reiterating OPEC's resolve to make up for any supply shortfall resulting from developing events. To this end, member countries have pledged to use, in the interim, their available excess capacities to ensure continued supply," OPEC's president Abdullah bin Hamad Al-Attiyah said.
Iraqi crude exports, totaling two million barrels a day, are expected to cease as the war intensifies.
April contracts of U.S. light, sweet crude fell to a low of $28.00 a barrel in after-hours trading before rebounding somewhat to $29.19, down 69 cents from Wednesday's close.
"It dropped like a stone," said Peter Gignoux, head of the petroleum desk at Salomon Smith Barney.
In London, May contracts of North Sea Brent crude fell to $25.53, down $1.22 a barrel. Brent bounced back, trading 30 cents lower at $26.45 by midday. Some traders anticipated firmer Brent prices on concerns that the war with Iraq might take longer than many had predicted.
However, Mr. Gignoux said he believed the so-called war premium built into prices had yet to fully disappear. Many analysts argued before the start of hostilities that fears of a disruption in Iraqi oil supplies had added more than $5 to the price of each barrel.
"The market doesn't look particularly strong at this juncture," he said.
Over the past three weeks, prices for U.S. light, sweet crude have fallen from their post-Gulf War high of $39.99 a barrel, reached on Feb. 27.
OPEC officials have indicated often in recent weeks that the group would pump more oil if necessary to ensure ample supplies. Its statement Thursday was an explicit commitment to do so. "While OPEC will continue to closely monitor and react to market developments, it is hoped that the measures taken will contribute to market stability and support world economic recovery," Mr. Attiyah said.
In light of the hostilities in Iraq, OPEC announced that its Secretary-General Alvaro Silva would hold a news conference at the group's headquarters in Vienna, Austria, at 1500 GMT.
Copyright (c) 2003 The Associated Press
Updated March 20, 2003 7:35 a.m.
