August 31, 2004
MAY AS WELL BURN IT, IT'S SO CHEAP:
Crude Oil Drops as Threats to Supply From Iraq, Russia Diminish (Bloomberg, 8/31/04)
Crude oil futures fell close to a one-month low on expectations a cease-fire in southern Iraq will reduce the sabotage of oil pipelines and supplies from Russia will increase.
Attacks on pipelines to southern Iraqi export terminals have decreased, allowing for near-normal exports of 1.75 million barrels a day today, according to two local shipping agents. Russia, which alternates with Saudi Arabia as the world's top oil producer, will boost output 6.9 percent this year to 450 million tons, President Vladimir Putin said.
"Iraq's sustained exports and Putin's positive declarations are calming the market,'' said Renzo Mejia, a broker at Sucden (U.K.) Ltd. in London. "The market is looking for any security improvements to lower the risk premium'' in prices, which had exceeded $10 a barrel, he said.
Crude oil for October delivery tumbled as much as 56 cents, or 1.3 percent, to $41.72 a barrel on the New York Mercantile Exchange and was trading at $41.90 at 1:44 p.m. London time. It has dropped 16 percent from its Aug. 20 intraday record of $49.40. In London, October Brent crude fell as much as 3.1 percent to a one-month low of $39.40.
Posted by Orrin Judd at August 31, 2004 10:59 AM