Oil Prices Fall Sharply on News From Iraq NewsMax.com Wires
Monday, June 28, 2004
WASHINGTON – The price of oil fell sharply on Monday, as traders viewed the transfer of political power in Iraq as a step that could help reduce attacks against the country's oil infrastructure.
Some additional pressure was taken out of the market late last week after the resolution of a labor dispute in Norway, the world's third-largest oil exporter.
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"You have a lot of good news out there," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago.
Light crude for August delivery traded at $36.12 a barrel in early trading on the New York Mercantile Exchange, down $1.43.
"I think the traders are really taking the news as 'Boy, this may have some of the opposition in Iraq think twice before they start attacking oil pipelines,'" Flynn said. "Now instead of attacking the U.S. coalition, they're attacking the Iraq government."
Another reason oil prices have eased is that Saudi Arabia said it would boost its output this month to 9.1 million barrels a day and would pump even more, if necessary.
But Flynn said there remains a level of nervousness in the market about the potential for terrorist attacks in Iraq, Saudi Arabia and elsewhere in the Middle East, adding that there existed a "terror premium" of several dollars a barrel to the price of oil.
Enviros Won't Allow Refineries
Also, because of limited refining capacity in the United States, more oil on the market does not necessarily mean the country's supply of gasoline will increase significantly or that prices will drop dramatically, Flynn said.
The retail price of gasoline has fallen in recent weeks. The average cost at the pump nationwide is about $1.94 a gallon.
Monday, June 28, 2004
WASHINGTON – The price of oil fell sharply on Monday, as traders viewed the transfer of political power in Iraq as a step that could help reduce attacks against the country's oil infrastructure.
Some additional pressure was taken out of the market late last week after the resolution of a labor dispute in Norway, the world's third-largest oil exporter.
Story Continues Below
"You have a lot of good news out there," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago.
Light crude for August delivery traded at $36.12 a barrel in early trading on the New York Mercantile Exchange, down $1.43.
"I think the traders are really taking the news as 'Boy, this may have some of the opposition in Iraq think twice before they start attacking oil pipelines,'" Flynn said. "Now instead of attacking the U.S. coalition, they're attacking the Iraq government."
Another reason oil prices have eased is that Saudi Arabia said it would boost its output this month to 9.1 million barrels a day and would pump even more, if necessary.
But Flynn said there remains a level of nervousness in the market about the potential for terrorist attacks in Iraq, Saudi Arabia and elsewhere in the Middle East, adding that there existed a "terror premium" of several dollars a barrel to the price of oil.
Enviros Won't Allow Refineries
Also, because of limited refining capacity in the United States, more oil on the market does not necessarily mean the country's supply of gasoline will increase significantly or that prices will drop dramatically, Flynn said.
The retail price of gasoline has fallen in recent weeks. The average cost at the pump nationwide is about $1.94 a gallon.
