Oil Slides As US Faces Many Roadblocks On Iraq
New York, March 14: World oil prices slumped on Thursday as the twisted road to war in Iraq appeared to lengthen, warm weather approached and Venezuela pumped more crude, traders said.
US President George Bush had run into a diplomatic tangle in the UN Security Council, traders said.
“The troubles the Bush administration is having at the UN appear myriad, giving the market the impression that the imminency of a war has been pushed out a bit,” Fimat USA analyst John Kilduff said.
New York’s reference light sweet crude contract for April delivery skidded $1.82 to $36.01 a barrel.
In London, the price of Brent North Sea crude oil for April delivery slid $1.44 to $32.47 a barrel.
The US, looking for a way around French, Russian or Chinese vetoes, said it could allow a UN security council vote on war against Iraq to slip into next week or even forego the vote altogether.
Michael McAllister, energy analyst at Fahnestock and Co, said news that Venezuela had recovered from strike action to push production up to 2.95bpd depressed prices. “It is a jittery market that can be swayed by one story,” he said.
Prices have already spiked up to within a whisker of $40 a barrel in New York recently, the highest level since the run-up to the last Gulf war, though they have since eased back to around $37-38.
But experts say such a swift drop in prices as seen in 1991 is less likely this time.
Lawrence Eagles, analyst at Brokers GNI-Man Financial, said on that occasion the oil market had been expecting a short war.