New York’s main contract, light sweet crude for October delivery, dipped 16 cents to 42.12 dollars per barrel in late deals on the New York Mercantile Exchange a day after a 90-cent drop.
The price of London’s benchmark Brent North Sea crude oil for delivery in October slumped 1.03 dollars to 39.61 dollars per barrel in closing deals, the lowest level for one month.
“The falls (in London) follow yesterday’s movement in New York, on signs of greater stability in Iraq,” said Prudential Bache broker, Christopher Bellew.
New York trade was uneventful. “I think a lot of big traders are on vacation with the (Labour Day) holiday coming up and the Republican Convention” ongoing in the city, said Phil Flynn at Alaron Trading.
But Flynn said he sees little room for prices to fall after a drop of more than seven dollars since the all-time high of August 20. “We’ll probably see traders slowly start pushing the market back up,” he said predicting a range of between 40 and 45 dollars.
“The market has priced in all the good news, has corrected enough,” he added. “We’ll start worrying about the winter heating season.”
We’ve never faced a heating season with prices so high.” Russian President, Vladimir Putin, meanwhile sought to reassure jittery markets with a pledge that his country would continue to increase the extraction and export of its oil resources.
The big news for the market came on Monday as Iraq’s radical Shiite leader Moqtada Sadr ordered a nationwide ceasefire and announced that his militant movement would join the political arena.
Sadr’s move offset southern pipeline attacks in Iraq on Sunday and Monday that halved export levels.
An official from the state-run South Oil Company said exports from southern Iraq had bounced back to 1.8 million barrels per day by late Monday.
In Russia, Putin said oil production was expected to reach 450 million tonnes this year and exports 255 million tonnes, an increase from 421 million tonnes of production and 228 million tonnes of exports last year.
(Business Day/AFP)
