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Crude falls below 43 end of august { August 26 2004 } Original Source Link: (May no longer be active)
http://money.cnn.com/2004/08/26/markets/oil.reut/?cnn=yeshttp://money.cnn.com/2004/08/26/markets/oil.reut/?cnn=yes
Light crude falls below $43
Brent hits 3-week low as Sistani enters Najaf with peace plan, big-money funds take profits.
August 26, 2004: 10:21 AM EDT
SINGAPORE (Reuters) - U.S. light crude prices fell below $43 a barrel Thursday, extending heavy losses to a fifth session, as investors hoped Ayatollah Ali al-Sistani's arrival in Najaf would bring an end to renewed violence and sabotage attacks in the country.
Renewed exports from Iraq also encouraged funds to take profits.
At about 10:15 a.m. ET, U.S. light crude fell 72 cents to $42.75 a barrel. London Brent crude fell 73 cents to $39.95 a barrel, dipping below $40 for the first time in three weeks,
U.S. prices were $6.65 below last week's record $49.40 high, but still more than $6 higher than at the end of June.
Iraq's leading Shiite cleric, Ayatollah Ali al-Sistani, arrived in the besieged city of Najaf from the holy city from Basra accompanied by thousands of supporters. He said he would unveil a peace plan to end a bloody standoff between Shiite radical militiamen holed up in the Imam Ali mosque and Iraqi and U.S. forces.
His arrival raised hopes that the fighting might end in the near future.
Saboteurs in Iraq overnight attacked a group of eight pipelines linking a main southern oilfield to a pumping station near the city of Basra, an Iraqi oil official said.
Shipping agents said southern Iraqi exports, recently restored to a full two million barrels a day, had been cut to 1.1 million bpd.
Iraq's south has been the focus of a U.S.-led offensive aimed at crushing a three-week-old Shiite uprising led by anti-U.S. cleric Moqtada al-Sadr.
Prices have been helped lower by profit-taking by hedge funds, dealers said, following Wednesday's U.S. government oil supply report showing refiners producing enough gasoline to meet summer vacation driving demand. They also said there were signs that producer companies have sought to lock in high prices by selling forward months on the crude derivatives market.
"There's a mixture of trade and fund selling," said Prudential Bache broker Tony Machacek.
"After such a substantial sell off yesterday a lot of people think it has some way to go to the downside."
Wednesday's sell-off came after weekly data showed ample U.S. gasoline inventories for motorists ahead of the Labor Day holiday weekend in September which marks the end of peak summer consumption for motor fuel.
The government Energy Information Administration (EIA) said U.S. gasoline stocks were steady at 205.7 million barrels in the week ended Aug. 20, near the upper end of their 5-year average. Analysts had expected gasoline supplies to drop due to summer vacation consumption, but the EIA said gasoline demand over the past four weeks was just 0.7 percent higher than last year.
OPEC President Purnomo Yusgiantoro said the retreat in global prices was not fast enough, and the producers' cartel wanted to see a swifter fall. OPEC planned to discuss whether to raise its official oil output ceiling at its Sept. 15 meeting in Vienna, he added.
The market was earlier unnerved by a mortar attack on supporters of al-Sadr in a mosque in the town of Kufa Thursday that killed at least 25 people, with prices rising for a short time. The killings came just before Iraq's most influential Shi'ite cleric entered Najaf to try toend the bloody uprising.
"Iraq started it all up. It was only a matter of time before something happened again," said Tony Nunan, manager at Mitsubishi Corp.'s international petroleum business.
"It could be a repeat of what happened in early June when crude dropped strongly and then a series of pipeline sabotages brought it up again."
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