Oil falls from record in New York as Turkey-Iraq tension abates
Tuesday, 6 November 2007
NEW YORK, Nov 5 (Bloomberg): Oil fell from a record after Kurdish fighters freed eight Turkish soldiers, reducing concern that Turkey may attack the north of Iraq, holder of the world's third-largest crude reserves.
The Kurdistan Workers' Party, or PKK, returned the captives yesterday, the army said in a statement on its Web site. Oil has climbed 20 per cent since Oct. 8 when Kurdish rebels killed 13 Turkish soldiers near the Iraqi border. Crude rose 4.4 per cent last week and is 58 per cent higher than a year ago.
``The PKK's release of Turkish soldiers should help the situation,'' said Olivier Jakob, managing director of Petromatrix GmbH in Zug, Switzerland. ``Technically, we can still have an attempt at $100 this week, if we stay above $95.''
Crude oil for December delivery fell as much as $1.32, or 1.4 per cent, to $94.61 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $94.98 at 9:45 a.m. in London.
On Nov. 2, oil rose $2.44, or 2.6 per cent, to settle at $95.93, the highest closing price since trading began in 1983.
``We have seen a slight easing of the situation in the Middle East, which is probably giving room for some profit- taking,'' said Mark Pervan, senior commodity strategist at Australia & New Zealand Banking Group Ltd. in Melbourne.
Turkish Prime Minister Recep Tayyip Erdogan meets with U.S. President George W. Bush today in Washington to discuss measures to deal with about 3,500 fighters from the Kurdistan Workers' Party, or PKK, in Iraq's north. Turkey has stationed about 80,000 troops near the Iraqi border and is threatening to strike PKK bases in northern Iraq unless the U.S. and Iraq act against the group.
Brent, Heating Oil
Brent crude oil for December settlement fell as much as 88 cents, or 1 per cent, to $91.20 on the London-based ICE Futures Europe exchange. The contract traded at $91.42 at 9:46 a.m. London time. It closed at a record $92.08 on Nov. 2.
U.S. heating oil inventories have climbed for the past two weeks, narrowing the difference from last year's level and easing concern that supplies may be inadequate before the Northern Hemisphere winter, said Hirofumi Kawachi, a senior energy analyst at Mizuho Securities Ltd. in Tokyo.
Mexico, the third-largest oil supplier to the U.S., said it resumed full oil output from wells in the Gulf of Mexico after a five-day disruption caused by a storm, state-owned Petroleos Mexicanos said on Nov. 2. Production had fallen by as much as 1.1 million barrels a day.
``Apart from the geopolitical risks there are few things to take the oil price higher,'' Kawachi said.
Dollar Effect
The weaker dollar is helping support crude-oil prices and may limit declines, said David Moore, a commodity strategist at Commonwealth Bank of Australia in Sydney.
The dollar fell to a record low against the euro on Nov. 2 on concern deepening credit-market losses will prompt the Federal Reserve to reduce interest rates a third time this year. The dollar dropped to $1.4528, the weakest since the European currency's debut in January 1999. It was at $1.4505 at 8:34 a.m. in Singapore.
The Kurdistan Workers' Party, or PKK, returned the captives yesterday, the army said in a statement on its Web site. Oil has climbed 20 per cent since Oct. 8 when Kurdish rebels killed 13 Turkish soldiers near the Iraqi border. Crude rose 4.4 per cent last week and is 58 per cent higher than a year ago.
``The PKK's release of Turkish soldiers should help the situation,'' said Olivier Jakob, managing director of Petromatrix GmbH in Zug, Switzerland. ``Technically, we can still have an attempt at $100 this week, if we stay above $95.''
Crude oil for December delivery fell as much as $1.32, or 1.4 per cent, to $94.61 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $94.98 at 9:45 a.m. in London.
On Nov. 2, oil rose $2.44, or 2.6 per cent, to settle at $95.93, the highest closing price since trading began in 1983.
``We have seen a slight easing of the situation in the Middle East, which is probably giving room for some profit- taking,'' said Mark Pervan, senior commodity strategist at Australia & New Zealand Banking Group Ltd. in Melbourne.
Turkish Prime Minister Recep Tayyip Erdogan meets with U.S. President George W. Bush today in Washington to discuss measures to deal with about 3,500 fighters from the Kurdistan Workers' Party, or PKK, in Iraq's north. Turkey has stationed about 80,000 troops near the Iraqi border and is threatening to strike PKK bases in northern Iraq unless the U.S. and Iraq act against the group.
Brent, Heating Oil
Brent crude oil for December settlement fell as much as 88 cents, or 1 per cent, to $91.20 on the London-based ICE Futures Europe exchange. The contract traded at $91.42 at 9:46 a.m. London time. It closed at a record $92.08 on Nov. 2.
U.S. heating oil inventories have climbed for the past two weeks, narrowing the difference from last year's level and easing concern that supplies may be inadequate before the Northern Hemisphere winter, said Hirofumi Kawachi, a senior energy analyst at Mizuho Securities Ltd. in Tokyo.
Mexico, the third-largest oil supplier to the U.S., said it resumed full oil output from wells in the Gulf of Mexico after a five-day disruption caused by a storm, state-owned Petroleos Mexicanos said on Nov. 2. Production had fallen by as much as 1.1 million barrels a day.
``Apart from the geopolitical risks there are few things to take the oil price higher,'' Kawachi said.
Dollar Effect
The weaker dollar is helping support crude-oil prices and may limit declines, said David Moore, a commodity strategist at Commonwealth Bank of Australia in Sydney.
The dollar fell to a record low against the euro on Nov. 2 on concern deepening credit-market losses will prompt the Federal Reserve to reduce interest rates a third time this year. The dollar dropped to $1.4528, the weakest since the European currency's debut in January 1999. It was at $1.4505 at 8:34 a.m. in Singapore.