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OIL prices remained in a downward trend today as United States forces continued to pound targets in Baghdad, bolstering speculation of a swift end to the war.

But analysts said a call by the head of the Organisation of the Petroleum Exporting Countries (Opec) for the producers’ cartel to meet in a little over two weeks could help limit the slump in the price of oil, which has fallen as much as ten per cent since the war began 20 days ago.

US light crude, which has fallen more than 30 per cent since it peaked at $40 a barrel in February, slide a further 1.4 per cent to $27.56 a barrel this morning. London’s Brent crude dipped to $24 a barrel, bringing losses to ten per cent since the start of the war.

Traders believe a short-lived war may mean minimum damage to Iraq’s oil infrastructure, allowing Iraq, normally the world’s seventh biggest exporter, to restore production relatively quickly.

Oil prices have also come under selling pressure as recent figures on the US economy have raised concerns it may be heading into recession, which would choke demand for petrol.

Sweeping cuts to air traffic because of Middle East hostilities and the deadly flu-like Sars virus in Asia have sharply dented requirements for jet fuel, at a time when oil demand traditionally declines at the end of winter.

Worried by the steep price falls, Opec president Abdullah al-Attiyah said he had proposed an emergency meeting of the producers’ group to consider steps to counter a looming glut.

Ministers from Opec countries were next scheduled to meet on June 11 in the Qatar capital, Doha, but Mr Attiyah, who is also Qatar’s oil minister, proposed the group should meet on April 24.

Oil analyst David Thurtell, of Commonwealth Bank in Sydney, said: "Opec is being proactive, using their usual manner of up by the stairs and down by the lift.

When prices are heading up, they act cautiously and slowly, but on the way down they will act decisively. I imagine they will try and cut back at least some of the increase they made for Venezuela."

Theage.com.ve April 9 2003 By Sri Jegarajah Singapore

Crude oil fell as much as 2.3 per cent in New York as US-led forces neared victory in Iraq, spurring concern that a resumption in exports from the Middle East oil producer could lead to a second-quarter global surplus.

"The market is facing a glut, not a shortage," OPEC president Abdullah bin Hamad al-Attiyah said in Paris. The group will meet on April 24 to discuss a cut in output to stem any plunge in prices below OPEC's $US25 a barrel target.

Prices are more than a quarter lower than a month ago as coalition troops tighten their control over Baghdad amid reports that Iraq's leader Saddam Hussein and his sons may have been killed in a bomb attack in the city.

"The war will be over soon. That's positive, but markets are now looking beyond Iraq," said Tetsu Emori, a commodity strategist at Mitsui Bussan Futures in Tokyo. "OPEC may have to cut output because demand in the second quarter is down."

Crude oil for May delivery fell as much as US65¢ to $US27.31 a barrel in electronic trading on the New York Mercantile Exchange. On Monday, oil fell US66¢ to $US27.96 a barrel. Prices have tumbled 30 per cent from a 12-year high of $US39.99 a barrel on February 27.

In Iraq, coalition forces now control 900 of the 950 oil wells in the southern Rumaila oilfield, the country's largest. Iraq produced an average of 2.48 million barrels of oil a day in February, about 3 per cent of world output.

"With the war news as positive as it is, if it weren't for the OPEC announcement we probably would have been down another dollar on the crude oil," said Chris Mennis, owner of New Wave Energy, a trader of oil swaps and oil products in California. "It probably kept prices from collapsing."

Oil rallied briefly on Monday after OPEC said it would hold the special meeting on April 24.

OPEC might consider a "maximum" output cut of 1 million barrels a day, Mr Emori said. A cut of 2 million barrels a day might inflate the price of oil, damaging economic growth in key oil consuming countries including the US, he said.

Oil output from OPEC rose in March to the highest level in 11/2 years, as increases in Venezuela and Saudi Arabia made up for a drop in Iraqi supply.

• Bloomberg

Reuters April 8, 2003: 7:44 AM EDT

LONDON (Reuters) - News Tuesday that OPEC may cut production to support its target of $25 oil countered the recent slide in crude prices, as U.S.-led forces battled in the Iraqi capital of Baghdad.

The 11-member Organization of Petroleum Exporting Countries is set to hold an emergency meeting April 24 to discuss output cuts after prices slumped 30 percent in the past month, threatening to dip below the group's $22-$28 preferred price range.

U.S. light crude for May delivery recovered from an overnight decline to trade up four cents at $28 a barrel, down from nearly $40 at the end of February, while London benchmark Brent blend for June delivery traded up six cents to $24.64. Brent hit a four-month low of $23.40 Monday.

"The market is supported by this talk that OPEC might cut production. This is the first we've heard from them for some time and it gives prices an excuse to retrace losses," said an IPE Brent broker from the London exchange floor. "The war is still a very bearish factor, but without OPEC I think the rug would be pulled out from under us."

OPEC, which controls 40 percent of global crude exports, has lifted production this year to cover supply losses from a two-month strike in Venezuela and to prevent any spike in prices if Iraqi crude exports were cut off by a U.S.-led war.

But prices have actually plunged by as much as a third since just before the war began 20 days ago, prompting cartel officials to start talking of a potential cut in production. Click here to check CNN/Money's commodities page

"Currently oil is in oversupply in the market. But we will see the development of the price," Indonesian Mines and Energy Minister Purnomo Yusgiantoro told reporters.

The lynchpin will be powerhouse Saudi Arabia, which had hiked output to a 21-year high in March to compensate for stoppages from Iraq, where U.N.-supervised exports of about 1.7 million bpd closed before the start of hostilities March 20.

A Gulf source familiar with Saudi officials said Tuesday OPEC was ready to keep prices near its target $25, but did not say whether it was considering a cut in the formal output ceiling, now at 24.5 million barrels per day, or remove excess output above that level, now running at two million bpd.

The war in Iraq remained a bearish factor for prices, as dealers looked forward to the return of Bagdad's supplies to world markets and the development of the country's massive reserves, second only to Saudi Arabia's.

A short-lived war may mean minimum damage to Iraq's oil infrastructure, allowing supplies to flow sooner.

U.S. tanks fought an intense battle with Iraqi soldiers in the heart of Baghdad Tuesday and officials said U.S. aircraft had dropped four 2,000 pound bombs in a residential area, specifically targeting Saddam and his sons Uday and Qusay.

The British army said it had taken control of Basra, Iraq's second city, while U.S. forces increased their presence in Baghdad.

Oil prices have also come under selling pressure as recent data on the U.S. economy have raised concerns that it may be heading into recession, which would choke demand for petroleum.  

<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.

Reuters, 04.04.03, 12:23 PM ET NEW YORK, April 4 (Reuters) - NYMEX crude oil futures stayed sharply lower midday Friday as shut-in Nigerian crude production began to restart and U.S. forces seized Baghdad's main airport, reinforcing hopes for a quick end to the war. Rising production from OPEC, evidenced by last week's surge in Saudi Arabia's exports to the United States and increasing shipments from Venezuela, remained a bearish factor. At 1215 EST (1715 GMT), NYMEX May crude traded 86 cents lower at $28.11 a barrel. Near the opening, it slumped $1.02 to a session low of $27.95. NYMEX prompt crude prices are down nearly $12 or 30 percent from a 12-year high of $39.99 reached on Feb. 27. In London, May Brent crude was down $1.08 at $24.42 a barrel. "The market is convinced that we will see rivers of oil flowing now that we have higher OPEC production and Nigeria is restarting previously lost production," said Phil Flynn, energy market analyst at Alaron Trading in Chicago. "Unless demand builds up as we go into the summer driving season, this influx of oil means prices will stay down." ChevronTexaco (nyse: CXV - news - people) said Friday it gradually restarted Nigerian production forced shut for 12 days due to ethnic unrest. It is aiming for Escravos crude production at 310,000 barrels per day, out of normal output of 440,000 bpd. Royal Dutch/Shell <SHEL.L> <RD.AS> said it had restarted on Thursday about 18,000 barrels per day of its Nigeria Forcados production at its Estuary flow station, after ethnic clashes forced it to shut production about two weeks ago. It said it planned to reopen other stations in the Southern Swamp of the western Niger Delta in "the coming days." Nigeria's sweet crude is a key gasoline maker for U.S. refiners heading into the heavy driving demand season at the end of May. Crude's heavy losses extended selling pressure from overnight that was sparked by news of U.S. forces taking control of Saddam International Airport, less than 10 miles from Baghdad This buttressed hopes that the war to oust Iraq's regime will end sooner rather than later, which "helps pave the way for Iraq's oil exports to resume before mid-year," said Mike Rothman, senior energy market analyst at Merrill Lynch. U.S. forces have secured 80-90 percent of Iraq's southern oil production capacity and aim to get Iraqi workers back on the job soon, according to a senior U.S. Army officer. Iraqi Information Minister Mohammed Saeed al-Sahaf said on Friday Iraq had no plans to use chemical or biological weapons against invading U.S. and British forces despite a threat to use "nonconventional " methods. Asked if Iraq would used weapons of mass destruction, Sahaf told a news conference: "No, not at all. But we will conduct a kind of martyrdom operations." Iraq denies U.S. and British accusations that it possesses weapons of mass destruction. The U.S.-led invasion of Iraq aims to disarm Iraq of those suspected banned weapons and drive President Saddam Hussein from power. Venezuela's restart of gasoline exports to the United States and crude exports rising to nearly two-thirds of pre-strike levels put more pressure on futures prices. Also in traders' focus are economic data indicating a struggling economy, as U.S. payrolls dropped by a worse-than-expected 108,000 in March, the government said Friday. The data highlighted the economy's fragility amid a war with Iraq that many economic analysts say has dampened hiring. NYMEX May gasoline futures were down 2.56 cents at 84.60 cents a gallon, trading rangebound between 84.00 to 85.80 cents. NYMEX May heating oil futures fell 1.47 cents to 71.70 cents a gallon, rangebound between 70.90 to 72.10 cents.