| Oil rebounds after iraq pipeline attack Original Source Link: (May no longer be active) http://www.reuters.com/financeNewsArticle.jhtml?type=businessNews&storyID=6087831http://www.reuters.com/financeNewsArticle.jhtml?type=businessNews&storyID=6087831
Oil Rebounds After Iraq Pipeline Attack Fri Aug 27, 2004 06:12 AM ET
LONDON (Reuters) - Oil prices rose on Friday, stemming five days of heavy losses as fresh sabotage attacks on Iraqi oil infrastructure despite a peace deal in Najaf renewed concern over the country's supplies. U.S. crude climbed 40 cents to $43.50 a barrel, around $6 below a record peak struck last Friday at $49.40. London's Brent crude gained 42 cents to $40.75 a barrel.
Prices have fallen 12 percent in the last week as speculators took profits after prices just failed to breach the $50 mark. Crude is still up nearly 40 percent since the turn of the year.
Hopes that a peace agreement between Iraq's government and rebel cleric Moqtada al-Sadr, ending a bloody three-week uprising in the holy city of Najaf, would lead to more reliable Iraqi oil flows faltered after a renewed attack on oil facilities
Saboteurs on Friday attacked two pipelines linking a main oil field to export storage tanks in southern Iraq, an Iraqi oil official said.
Exports were running at 1.5 million barrels a day, down from 2 million bpd earlier in the week, although it was unclear whether the fall was a result of the sabotage attacks or normal tanker movements, shipping agents said.
Saboteurs on Thursday attacked eight pipelines linking a southern oilfield to a pumping station near Basra.
U.S. DRIVING SEASON NEARS END
Turmoil in Iraq has underpinned oil price strength in recent months, adding to worries over a lack of spare production capacity from other OPEC nations and flourishing demand growth in China and India.
A U.S. government report on Wednesday showing higher-than-expected gasoline inventories at the tail-end of the summer vacation season in the world's largest energy consumer also knocked prices lower.
U.S. summer driving demand ebbs after Labor Day weekend in early September, signaling a period of lower consumption ahead of the northern winter heating season.
Analysts say that while prices have been due to correct lower they may not fall far as global demand growth run at the fastest rate in 24 years.
OPEC has signaled that it plans to increase production to combat high oil prices, saying output would reach 30.5 million bpd in September from 29.6 million bpd in July.
But a leading oil shipping analyst added on Thursday that crude oil shipments from OPEC were expected to have declined 380,000 bpd in August, countering expectations they would increase.
"The projections are probably not far from the truth in terms of production and exports and are mostly down to interruptions in Iraqi oil supplies," said Roy Mason of consultancy Oil Movements.
"If it's confirmed by other agencies like the IEA (International Energy Agency) and other analysts then it runs counter to what we actually thought was going on in August, namely that exports were climbing," he said.
OPEC will meet on Sept. 15 in Vienna to discuss a possible further increase in production quotas.
© Reuters 2004. All Rights Reserved.
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