SINGAPORE, April 9 (Reuters) - Oil prices receded on Tuesday
as Israeli forces began leaving Palestinian areas on the West
Bank, raising speculation that Iraq will review its decision to
stop oil exports for 30 days.
U.S. benchmark light crude fell 40 cents to $26.14 a barrel
in Asia, wiping out a 33-cent gain on the New York settlement.
Brokers said the withdrawal of Israeli tanks from two West
bank cities triggered the decline in crude, which briefly rallied
above $27 on Monday when Iraq said it would halt daily exports of
some two million barrels in support of the Palestinians.
Iraqi President Saddam Hussein said the stoppage was
effective immediately and would stay in place for 30 days or
until Israel withdrew from Palestinian areas unconditionally.
The Israeli army left Qalailya and Tulkarm under cover of
darkness on Tuesday and the United States said it hoped the
withdrawal was the beginning of a wider pull back, although there
was no word from Israel when it would quit other cities.
Iraq's oil sales account for about four percent of oil traded
worldwide and the suspension heightened fears of a possible
supply crunch with oil shipments from Venezuela already hit by a
strike at state oil firm Petroleos de Venezuela.
Venezuela pumps some 2.6 million barrels per day (bpd) of
crude and accounts for about 15 percent of U.S. oil imports. Iraq
also is a major crude supplier to the United States, which takes
about nine percent of imports from Baghdad.
VENEZUELA BRINGS IN MORE TROOPS The government of President Hugo Chavez ordered extra troops into oil facilities on Monday to prevent any shutdown of output in the world's fourth biggest exporter. The government insisted that oil shipments were normal, while protesting PDVSA workers, private traders and shippers reported severe disruptions at oil export terminals, refineries and PDVSA offices, Latin America's biggest oil company. Protesters are demanding that Chavez revoke the appointment of five new PDVSA board members named in February because the appointments were based on political loyalty rather than merit. The loss of Venezuelan and Iraqi oil comes when 12 months of cuts by the OPEC producers' cartel have begun to bite into world supplies. The Organisation of the Petroleum Exporting Countries has slashed output by five million bpd, or nearly 20 percent, since January 2001 to buoy prices as demand faltered due to the economic downturn. In March, the cartel agreed to extend output curbs until at least June, when ministers are due to meet to review market conditions. Despite cuts, fuel supplies in the United States continue to run at comfortable surpluses versus a year ago and traders will be watching for inventory data from the American Petroleum Institute for latest stocks movements. A Reuters survey of analysts predicted that the API would report a slim one million barrel decline each in U.S. crude and gasoline tanks, while distillates would fall by a marginally larger 1.2 million barrels. The API releases its weekly report after the close of New York business each Tuesday. Oil has risen by over 40 percent since a mid-January dip below $18 a barrel and some economists fear high energy prices could derail the fragile U.S. economic recovery. ((Asia Energy Desk +65-6870 3833 Fax +64 6870 3015 himangshu.watts@reuters.com))
09 APR 2002 05:12:42 Oil prices dip as Israel withdraws some tanks
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