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Oil Prices Drop Sharply Despite of Iraqi Pipeline Attacks
EFL: Oil prices dropped sharply Monday, falling below $42 a barrel, as last week's selloff continued despite sabotage of Iraqi oil infrastructure that curbed exports. "It just goes to show you that when the psychology turns, it turns," said Tom Bentz, a trader at BNP Paribas Futures in New York. There were also signs out of Iraq on Monday that a peace deal reached in Najaf, Iraq, last week could spread to other parts of the country. An aide to Muqtada al-Sadr said the rebel Shiite cleric called for his followers across Iraq to end fighting against U.S. and Iraqi forces and that he is planning to join the political process in the coming days. Light sweet crude for October delivery plunged by $1.21 to $41.97 in afternoon trading on the New York Mercantile Exchange. At that level, crude futures were trading roughly 14 percent below the record settlement high of $48.70 on Aug. 19. Oil markets have been extremely volatile this summer because traders fret there is inadequate excess supply globally in the event of a prolonged output disruption in Iraq, Russia or Venezuela. But with the exception of sporadic dropoffs in Iraqi oil exports due to attacks on industry infrastructure, none of these fears have materialized. Oil-price speculation by institutional investors, including hedge funds, magnified this summer's surge in prices, as well as the latest retreat, traders said. Posted by: Steve 2004-08-30 |
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