Posted on 12/14/2003 6:18:29 PM PST by yonif
SINGAPORE (Reuters) - U.S. crude oil prices fell more than $1 on Monday after the capture of former Iraqi leader Saddam Hussein raised the prospect of a reduction in sabotage attacks on Iraq's oil industry and a boost to world supplies. U.S. light crude for January delivery (CLc1: Quote, Profile, Research) dropped almost four percent to an early intraday low at $31.74 a barrel in opening electronic ACCESS dealings on the New York Mercantile Exchange (NYMEX).
By 7:32 p.m. EST Sunday, U.S. crude was $1.06 down at $31.98 a barrel.
"There are mixed views about Saddam's arrest, but I feel this will eventually be negative for the market on the view that the market will have more supplies from Iraq as there should be more stability in the country," said Koji Suzuki, a manager at Star Futures Securities in Tokyo.
The United States announced that it had found Saddam hiding on Saturday in a pit at a farm at Ad-Dawr, near his hometown of Tikrit in northern Iraq.
Shamkhi Faraj, head of Iraq's State Oil Marketing Organization (SOMO), told Reuters on Sunday Saddam's arrest may improve security in the north of the country, allowing crude exports from the Kirkuk pipeline.
Katsunori Watanabe, research director at Nihon Unicom Corp in Tokyo, said, "Fund operators, who piled up their long positions massively on Friday, are now dumping them on expectations that there will be more stable crude supplies from Iraq after Saddam's arrest."
Repeated sabotage attacks on the pipeline that carries oil from the Kirkuk fields to the Turkish Mediterranean have made it impossible for Baghdad to export crude and maximize oil revenues needed to fund its reconstruction.
"His supporters will fall more into line with the mainstream, which will make it easier to secure the system (from sabotage)," Faraj said.
Iraq now exports about 1.5 million barrels per day of Basra Light crude oil out of its southern Basra Oil Terminal in the Gulf.
U.S. crude prices jumped more than $1 on Friday in New York as forecasts for cold weather in the U.S. Northeast at the weekend raised expectations of strong heating fuel demand.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.