Oil prices dip as traders monitor Ecuador, Iraq
Oil prices dip as traders monitor Ecuador, Iraq
Agence France-Presse, London
Oil prices dropped in New York on Monday as traders tracked news in Ecuador and Iraq, while London trading was suspended after an apparent power failure at the International Petroleum Exchange, dealers said.
Oil futures were retreating after Ecuador declared an end to six days of civil unrest that had slashed its oil exports. Meanwhile, Iraq suspended all oil exports on Monday from its southern fields after a suspected power outage.
New York's main contract, light sweet crude for delivery in September, fell 19 cents to US$65.16 per barrel in electronic trade.
The price of Brent North Sea crude oil for delivery in October stopped at 04:36 GMT on Monday, at which point the price had declined one cent to $64.35 per barrel. The trade of gasoil also ceased.
The fall in prices was "a little bit of a correction after the strong close on Friday night", Bache Financial trader Christopher Bellew said.
"On Friday night, there was the story about Ecuador... which caused oil and metals to strengthen."
Ecuador is the fifth-largest crude producer in South America.
About 60 protest leaders arrived in the capital Quito late Sunday in military planes to hold talks with the government in a bid to end a strike that has cost millions of dollars.
"We granted a suspension to talk with administration officials, but lifting the strike depends on the agreements we reach," Orellana provincial governor and protest leader Guadalupe Llori told AFP.
An offer by neighbor Venezuela to make up for any production loss from Ecuador was also a major factor in calming the market, which was due for a correction because of a sharp spike in prices on Friday, an analyst said.
"What has changed since Friday is that Venezuela agreed to assume Ecuador's oil export commitment," said Dariusz Kowalczyk, investment strategist at CFC Seymour Securities in Hong Kong.
Even as the situation in Ecuador stabilized, the market remained jittery over supply problems, dealers said.
Further compounding supply worries, Iraq's oil ministry in Baghdad said it was checking reports of a power outage, but other industry sources in southern Iraq confirmed both the power failure and the halt in exports.
At least two thirds of Iraq's 1.6 million barrels per day of oil exports come from the southern oil fields.
Iraq's vast oil reserves, the world's second biggest after Saudi Arabia, are largely concentrated to the north and the south of the country.