Iraq bomb blast sees oil future prices rise
Saboteurs caused the blast yesterday on the pipeline that links the Rumaila and Zubayr oil fields, Al-Hayat newspaper reported, citing an unidentified official from the state-run South Oil Company.
However, three agents who provide services for tanker owners said that Iraqi oil exports through the Basra terminal in the Persian Gulf are unaffected.
Oil has fallen by about $6 a barrel since reaching a record $49.40 a barrel on August 20.
“Prices remain at dangerously high levels because demand in Asia is still strong and there are a lot of concerns about the situation in Iraq and instability throughout the Gulf,’ said Khan Zahid, chief economist at Riyad Bank in the Saudi Arabian capital.
Crude oil for October delivery rose 31 cents, or 0.7%, to $43.49 a barrel in morning trading on New York’s Mercantile Exchange electronic trading. Prices fell by 7.6% last week, the first weekly decline since June. The September contract touched $49.40 on August 20, the day it expired, the highest price since New York oil futures started trading in 1983.
The International Petroleum Exchange in London was closed for a public holiday.
Oman crude oil for immediate delivery, an Asian benchmark, fell 50 cents to $37.18 a barrel on Friday.
Oman and Dubai crude oil, the pricing benchmarks used by Asian refiners, have declined 11% after rising to a one-year high on August 20, according to Bloomberg.
Vessels at the Basra terminal, the larger of Iraq’s two export facilities in the Gulf, are loading at a combined rate of 60,000 to 65,000 barrels an hour, or about 1.5 million barrels a day, said the three agents, who asked not to be identified.
South Oil shut one of two pipelines supplying oil to the export terminals earlier this month because of threats of attack from Shi’ite militants. The closure cut exports by as much as half until the pipeline reopened on August 22.
“OPEC hasn’t got a report on whether the attack in Iraq has disrupted supply,” Purnomo Yusgiantoro, the president of the Organisation of Petroleum Exporting Countries, said.
Saboteurs also struck eight pipelines in southern Iraq on Thursday, a South Oil’s spokesman said by telephone from Basra, the regional capital.
Crude oil’s plunge since failing to reach $50 a barrel on August 20 has convinced more traders and analysts that prices will continue to fall, according to a Bloomberg News survey carried out on Thursday.
Nineteen of 39 traders and analysts surveyed predicted a drop in crude-oil futures this week, while 17 forecast a rise and three were neutral. A week ago, 24% of respondents said oil would fall.
Hedge-fund managers and other large speculators last week decreased their bets that the price of New York oil would rise, according to US Commodity Futures Trading Commission data.
Speculative long positions, or bets that prices will rise, fell by 34% as of Tuesday on the New York Mercantile Exchange, from a week earlier.
Long positions still outnumbered short positions, or bets prices will fall, by 31,434 contracts.
Oil prices fell last week as fighting in the Iraqi city of Najaf ended and the country restored its oil exports from its southern terminals to a figure close to 2 million barrels a day.
