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| Thursday, 19 August 2004 |
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Oil prices rise amid Iraq, Yukos worries PARIS, Wednesday (AFP) World oil prices resumed their upward march on Tuesday on market concerns over a large drop in exports from Iraq and the ongoing financial crisis at Russian oil giant Yukos, analysts said. The price of Brent North Sea crude oil for delivery in October climbed 17 cents to 42.86 dollars per barrel in late deals in London. Prices remained a long way behind Monday's all-time high of 44.11 dollars in London, largely because of the expiry of the September contract which was replaced by the October contract as the new benchmark. New York's reference contract, light sweet crude for September delivery, rose 55 cents to 46.60 dollars per barrel in early trading, below a record of 46.91 dollars set on Monday. Prices reversed earlier losses caused by easing fears of disruptions to supplies from Venezuela, the world's fifth largest exporter of crude. Traders had breathed easier earlier Tuesday following news that Venezuelan President Hugo Chavez had comfortably won a weekend referendum on his mandate, easing fears of instability in the country's oil industry. The Venezuelan leader had warned an opposition victory in the recall referendum would lead to the privatization of the state oil firm Petroleos de Venezuela (PDVSA) and prompt oil workers to strike. "The maintenance of the status quo has eased concerns about possible short-term disruptions to oil production and exports from Venezuela," said Juliette Kerr, an analyst for the World Markets Research Centre. But she noted: "The lack of spare capacity among OPEC producers, uncertainty about Yukos production and attacks on oil installations in Iraq means that any sign of possible supply disruptions from elsewhere has the potential to push oil prices even higher." Export of crude from Iraq's southern oil terminals have been cut by half for a week now because of threats to infrastructure from Shiite militia, an oil company official said Tuesday. "One of the two pipelines is closed for security reasons and pumping stands at around 36-42,000 barrels an hour", against 80,000 normally, the official of the Southern Oil Company told AFP. Supporting prices Tuesday was news also that a Moscow court had failed to give a decision over whether Yukos could force the Russian government to sell its contested stake in a rival company to pay off its crushing tax bill. Yukos wishes to use its stake in rival Sibneft to pay off 3.4 billion dollars in back taxes claimed by the state. Against a backdrop of supply worries, traders were waiting anxiously for weekly estimates of US oil inventories due to be published on Wednesday. "All eyes will be on what's going to happen to the stocks figures," said Robert Laughlin, a trader at GNI-Man Financial. Market expectations were for a fall in crude oil inventories of one million barrels, a drop of 800,000 in those of gasoline and an increase of 1.3 million in distillate stocks, he said. The stock levels could show the effect of Hurricane Charley, the worst US storm in 12 years, traders said. |
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