MARKET WATCH: Crude oil futures prices gain on expectations of Iraqi war ending soon

<a href=ogj.pennnet.com>Oil&Gas Journal By OGJ editors

HOUSTON, Apr. 4 -- Crude oil prices rose moderately Thursday on speculation that the US-led war on Iraq could end soon, which subsequently would mean a return of Iraqi oil to markets before long.

The speculation of a quick victory by allied troops was prompted as US forces pushed toward Baghdad. Traders said an end to the war and the return of Iraqi oil to the market could cause a global supply surplus.

Meanwhile, the US Department of Energy reported Venezuela exported 843,000 b/d of oil to the US in March. That was about two-thirds of the levels shipped before Venezuela's general labor strike started in December, Reuters News Wire reported.

Reuters also reported on Friday that ChevronTexaco Corp. and Royal Dutch/Shell Group are gradually restarting Nigerian oil production that both oil majors had shut down 12 days ago due to ethnic clashes.

NYMEX movement The May contract for benchmark US sweet, light crudes gained 41¢ to $28.97/bbl Thursday on the New York Mercantile Exchange, while the June contract rose 5¢ to $27.26/bbl.

Refined products also closed higher with heating oil for May delivery climbing 1.31¢ to 73.17¢/gal. Unleaded gasoline for the same month improved by 0.77¢ to 87.16¢/gal.

The May natural gas contract lost 1.46¢ to $4.92/Mcf on NYMEX. "Facing a bearish build in storage inventories and mild weather forecasts that could stretch into summer, the dip was helped along by funds selling, and locals probing for technical sell stops into the $4.80s(/Mcf)," said analysts Friday at the Enerfax Daily.

Enerfax noted that the gas market remains in a downward trend, having fallen 48% since highs in late February.

Other prices In London, the May contract for North Sea Brent oil gained 29¢ to $25.50/bbl Thursday on the International Petroleum Exchange. Brokers said inventories still remain historically low and any significant output cuts as a result of the war in Iraq or any additional ethnic unrest in Nigeria could boost prices again by renewing fears of a crude shortage.

The May natural gas contract gained 1.6¢ to the equivalent of $2.56/Mcf on IPE.

The average price for OPEC's basket of seven benchmark crudes rose by 24¢ to $26/bbl Thursday.