Transfer of power in Iraq brings dip in oil prices

Jun 29, 2004 02:00 AM

Prices on gasoline futures tumbled, along with crude oil prices. Over time, prices at the pump should follow.
A big reason for the decline was that the market saw a potential for stabilization in Iraq, which regained sovereignty from the United States. Iraq restored shipments through Persian Gulf terminals damaged by terrorists earlier.

And in Norway, oil output returned to normal after the government halted a strike that had stalled shipments from the world's third-largest exporter.
"The war on Iraq has put a $ 7 to $ 9 premium on crude," said Dennis O'Brien, director of the Sarkeys Energy Centre at the University of Oklahoma. "If for some reason the war on Iraq would cool down, you would see prices fall more."

Contracts for gasoline futures jumped 23 % this year as the economy improved and terrorist attacks on Middle East pipelines fuelled a rally in oil prices. Iraq has the world's biggest pool of oil reserves after Saudi Arabia.
At the New York Mercantile Exchange, the world'slargest trading post for energy, gasoline futures for July delivery were down 5 %, to $ 1.145 a gallon.

The benchmark crude -- West Texas Intermediate -- fell about 3 % to $ 36.24 a barrel for August delivery. Crude traded as high as $ 42.33 on June 1.
"It's nice to see this happen," said Peyton Feltus, a Dallas energy trader with Randolph Risk Management. "A little less expensive energy will help the global economy."

Source: The Dallas Morning News
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