Posted on 06/08/2006 6:41:56 AM PDT by BenLurkin
VIENNA, Austria (AP) -- Oil prices fell below $70 per barrel Thursday for the first time in two weeks following the announcement of the death of al-Qaida's leader in Iraq, terrorist leader Abu Musab al-Zarqawi.
Word by Nigerian militants that they would release foreign hostages and an easing of world tensions over Iran also calmed markets, which were already on a downward course after U.S. data showed ample crude and gasoline supplies.
"The hope is that with the removal of the terror leader in Iraq, the Iraqi situation will stabilize faster and future oil supply could increase," said Victor Shum, energy analyst with Purvin & Gertz in Singapore.
A Jordanian-born militant, al-Zarqawi led a campaign of suicide bombings, kidnappings and other violence. Insurgents have also sabotaged pipelines numerous times.
Light sweet crude for July delivery on the New York Mercantile Exchange fell more than a dollar on the announcement in Baghdad that al-Zarqawi had been killed in an air raid. It was down 87 cents at $69.95 a barrel in electronic trading by afternoon in Europe.
July Brent crude futures on London's ICE Futures exchange fell 88 cents to $68.31 a barrel.
Thursday's slide in oil prices continued a two-day trend as the market adjusted to U.S. government data showing higher crude oil and gas inventories and some easing of tensions over Iran's nuclear program.
"If there are indications of a rapid diplomatic solution, prices could fall quite quickly to the mid-60s (per barrel)," Shum said. "But the general market feeling is that it will still take weeks to resolve the issue."
Iran has said it would study a package of incentives by world powers hoping to curb its nuclear program.
For Nigeria, Vienna's PVM Oil Associates noted that "following months of attacks and kidnappings some 611,000 barrels a day of Nigerian crude remains shut in." Still, tension there also ebbed Thursday, with militants in the oil-rich delta region saying they would release five kidnapped South Korean oil workers.
Despite the geopolitical jitters, the oil market remains well-supplied.
In its weekly report Wednesday, the Energy Department said U.S. crude-oil stocks grew last week by 1.1 million barrels to 346.6 million barrels, or 4 percent above year-ago levels. Gasoline inventories grew by 1 million barrels to 210.3 million barrels, or 2.5 percent below year-ago levels.
The commercial supply of distillates, which include heating oil and diesel, increased by 1.8 million barrels to 120.7 million barrels, or 8.5 percent more than a year ago.
On a week-to-week basis, the agency's report showed a slight decline in refinery output and gasoline demand. Over the past four weeks gasoline demand is 0.7 percent higher than it was during the same period a year ago.
Gasoline and heating oil futures both fell, by more than 3 cents to $2.0900 and by more than 2 cents to $1.9705 a gallon, respectively. Natural gas rose more than 8 cents to $6.055 per 1,000 cubic feet.
Associated Press writer Tanalee Smith in Singapore contributed to this report
I hope whoever turned in that terrorist knew how to play the financial market. :)
Perception not reality has more impact on todays stock markets.........but that is always true.
Iran is going to after gin something up today.
Tim "Cartman" Russert has put a cautionary and negative spin on this news, little Matt on Today brought as many negative remarks to the occasion as he was told to by his commie bosses on his earpiece. God, what pathetic morons, really nauseating. Shaddup, Fat Timmy, I hope you go the way we sent Danny boy, to hell in the journalism war.
Oh geez! More bad news for democrats!
So, if we have all his oil, gasoline and heating distillates, why are our prices so high? Of course big oil couldn't possibly be gouging us could they? Just curious.
How can you know if these morons are right?
Price up? Not supply and demand it's the Iran situation.
Price Down? Not supply and demand its the death of a terrorist.
What determines future prices is expected supply and expected demand. Period.
See? The war on terror really is about oil. /sarcasm
Bush's fault.
(Denny Crane: "Every one should carry a gun strapped to their waist. We need more - not less guns.")
Good question.
How about this: "Stocks Fall Further on Rate Worries" http://biz.yahoo.com/ap/060608/wall_street_morning.html?.v=1
He dropped dead and so do oil prices. I like the correlation.
Maybe if we can knock of al-Zawahiri and bin-Laden we'll get the price of gas back below $2.00 a gallon.
Anything that gets Fat Tim to stop incessantly droning on and on and on about his friggin dad. He's excruciatingly boring even in the few seconds it takes to turn him off.
We keep killing these guys and we will have $1.00 a gal gas in no time.
I suggest we revisit Shock and Awe
Which confuses me a bit. Oil price DOWN, from reports demand is DOWN, yet the prices at the pump went UP 20 cents here yesterday. $2.86
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.