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Oil prices slip on economic concerns
NEW YORK
Petroleumworld.com, Mar 31, 2008
World oil prices fell sharply Friday on renewed concern that a slowdown in the US economy would dampen energy demand and on news that damage to an Iraqi pipeline was not as serious as first thought.
New York crude values dropped under 106 dollars a barrel, a day after spiking above 107 dollars when it was announced that saboteurs had attacked a pipeline in Iraq, which heightened concerns over tight global supplies of energy.
New York's main oil futures contract, light sweet crude for delivery in May, closed down 1.96 dollars at 105.62 dollars per barrel.
In London, Brent North Sea crude for May delivery settled down 1.23 dollars at 103.77 dollars.
"Oil futures slid as markets once again refocused on US economic concerns as it was suggested that oil flow through the damaged Iraqi pipeline may be almost back to normal," said Sucden analyst Michael Davies.
"Despite the speedy turnaround, it remains clear that markets will remain nervous that we could see more disruptions in the region following the explosion of fighting in the area," he added.
One of Iraq's two main oil export pipelines near the southern city of Basra was blown up on Thursday amid escalating fighting.
Davies added that oil prices were falling on Friday after negative economic comments from US officials a day earlier "helped to remind the market that energy demand growth could falter in the world's largest consumer."
However losses were limited by a weaker-than-expected energy stockpiles report this week in the United States, the world's biggest energy consumer, traders said.
The US government said on Wednesday that crude inventories were unchanged at 311.8 million barrels in the week ending March 21, contrasting sharply with market expectations for a weekly gain of 1.8 million barrels.
Global supplies are being further pressured by a decision earlier this month by the Organization of the Petroleum Exporting Countries to maintain the cartel's output levels.
Elsewhere, the board of Shell's oil subsidiary in Gabon said on Wednesday that it was working hard to resolve a strike which has halted production for the last seven days.
Action by oil workers in the west African nation has halted 60,000 barrels a day of crude production since the strike began on March 20.
Another 30,000 barrels exported by France's Total Gabon and Perenco through Shell's Gamba terminal are also on hold.
Amid global supply disruptions, New York crude hit a record intraday high of 111.80 dollars on March 17 while London Brent scored a historic peak of 108.02 dollars earlier this month.
Story from AFP
AFP 28 1940 GMT 03 08
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