Saddam capture may help oil prices

Hopes were high today that there would be a smoother flow of oil from Iraq following the capture of former president Saddam Hussein.

Crude prices were lower, falling to a low of $29.60 (€24.09) a barrel in early trade with Brent crude for January delivery remaining 44 cents lower at $29.73 (€24.20) by noon in London.

In electronic trading, Nymex crude was down 54 cents to $32.50 (€26.45) a barrel.

However, news of two car bombings in Iraq which killed nine people left traders exercising caution.

According to Kevin Norrish of Barclays Capital: "For short-term market fundamentals the key question is whether or not Saddam's capture will reduce the sabotage that has kept Iraqi oil exports constrained.

"The relatively modest price response seen so far suggests that the market is not reacting in a knee-jerk fashion to the news," he added.