| Rally trigged by news of pipeline explosion Original Source Link: (May no longer be active) http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&c=Article&cid=1094163011073&call_pageid=968350072197&col=969048863851http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&c=Article&cid=1094163011073&call_pageid=968350072197&col=969048863851
Sep. 3, 2004. 01:00 AM Crude oil rally runs out of gas Iraq, Yukos woes trigger early spike
Profit taking drives down price
NEW YORK—Crude oil futures finished a tad higher yesterday, as an early rally succumbed to a late wave of profit taking.
The early rally was triggered by news of a pipeline explosion in Iraq and fresh concerns about the future of top Russian oil producer OAO Yukos Oil Co.
But speculators decided to take profits after the Russian government indicated the company's operations weren't threatened by a court action against it, said analyst Andy Lebow of ED&F Man in New York.
"The market is very volatile, very headline-driven," Lebow said. "There was conflicting news about Yukos and about Iraq and that added to the volatility."
At the New York Mercantile Exchange, crude oil futures for October delivery ended at $44.06 (U.S.) a barrel, up 6 cents, after trading as high as $45.37.
On London's International Petroleum Exchange, Brent futures charted a similar course, with the front-month October contract finishing only 10 cents higher at $41.57 after hitting an intraday high of $43.04.
Petroleum products futures also shed most of their intraday gains. The October gasoline futures contract settled with a gain of 42 points at $1.1932 a gallon after rising as high as $1.2350 a gallon. October heating oil futures rose 14 points to close at $1.1839 a gallon. The contract had earlier rallied as high as $1.22 a gallon.
The catalyst for the midmorning rally was news that saboteurs had blown up an oil pipeline in northern Iraq, touching off a fire.
The explosion occurred in the town of Riyadh, about 75 kilometres southwest of Kirkuk. The pipeline links Iraq's northern oil fields with the oil refinery of Beiji.
The news followed a statement by Yukos that a court decision Tuesday to freeze the bank accounts of its subsidiaries "paralyzes" its ability to produce and export oil.
Yukos said the action means its units "no longer have the ability to conduct any transactions, including payment of salaries and taxes and for current operations."
The statement didn't say when it might have to stop oil production. A spokesperson declined to comment on the timeframe of a possible production outage.
from the star's wire services
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