Posted on 03/20/2003 6:10:25 AM PST by CholeraJoe
LONDON -- Oil prices tumbled in early trading today after the U.S. military launched air attacks on Baghdad, with futures contracts in New York falling by as much as $1.88 a barrel.
The Organization of Petroleum Exporting Countries sought to calm oil markets by announcing that its members have pledged to maximize production to make up for any disruption in crude exports from Iraq.
"I am herewith reiterating OPEC's resolve to make up for any supply shortfall resulting from developing events. To this end, member countries have pledged to use, in the interim, their available excess capacities to ensure continued supply," OPEC's president Abdullah bin Hamad Al-Attiyah said in a statement.
Iraqi crude exports, totaling 2 million barrels a day, are expected to stop if the war intensifies.
April contracts of U.S. light, sweet crude fell to a low of $28.00 a barrel in after-hours trading before rebounding to $29.25, down 63 cents from Wednesday's close.
"It dropped like a stone," said Peter Gignoux, head of the petroleum desk at Salomon Smith Barney. U.S. light, sweet crude had reached a post-Gulf War high of $39.99 a barrel on Feb. 27.
In London, May contracts of North Sea Brent crude fell to $25.53, down $1.22 a barrel. Brent began to recoup much of the loss, trading 2 cents higher at $26.77 by midmorning.
Some traders anticipated firmer Brent prices on concerns that the war with Iraq might take longer than many had predicted.
However, Gignoux said he believed the so-called war premium built into prices had yet to fully disappear. Many analysts argued before the start of hostilities that fears of a disruption in Iraqi oil supplies had added more than $5 to the price of each barrel.
Iraqi crude exports, totaling 2 million barrels a day, are expected to stop if the war intensifies.
Dunno, prices were falling before this, and a day or two back I noticed that wholesale gasoline dropped 7 cents a gallon. That usually hits the pumps quickly -- at least if the price is going up :-)
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