Prices slip as Turkish troops begin to withdraw from Iraq
Crude prices slipped today for the fourth consecutive day. Prices slipped as Turkish troops began to withdraw from Iraq. Price also fell on speculation that warmer weather in the eastern U.S. will curb fuel use.
For the day ending Tuesday, 18 December, 2007, crude-oil futures for light sweet crude for January delivery closed at $90.49/barrel (lower by $0.14/barrel or 0.2%) on the New York Mercantile Exchange. Futures rose as high as $92.88 and fell as low as $88.88 today. The January contract expires today. The more-active February contract dropped 97 cents (1.1%) to $90.08 a barrel.
Earlier in the day, about 300 Turkish troops crossed into northern Iraq in a raid against Kurdish rebels. That’s when crude price shot up beyond $92/barrel. But when the troops began withdrawing, prices fell.
Turkey has been fighting the Kurdistan Workers' Party, or PKK, which is seeking autonomy for Turkey's largely Kurdish southeast and uses northern Iraq as a base from which to attack Turkish forces since the past 20 years.
Yesterday, as per the Algerian Oil Minister, Chakib Khelil, OPEC might decide to increase quotas when it meets 1 February, 2008. He is expected to take over as President of OPEC on 1 January, 208.
Members of the OPEC left production targets unchanged at the 5 December meeting in Abu Dhabi. The group, which produces 40% of the world's oil, will review output at a 1 February meeting in Vienna.
Brent crude oil for February settlement fell $1.17 (1.3%) to $90.12 on the London-based ICE Futures Europe exchange.
Natural gas rises but gasoline and heating oil drop
Natural gas rose as speculators who had sold contracts in bad bets on falling prices bought the positions back to protect gains or limit losses. Gas for January delivery rose 10.6 cents (1.5%) to settle at $7.141 per million British thermal units.
Against this backdrop, January reformulated gasoline fell 3.11 cents at $2.3043 a gallon and January heating oil lost 4.25 cents at $2.5554 a gallon.
As per EIA, global oil markets will likely remain tight through 2008 and monthly average oil prices are expected to near $85 per barrel over the next year. The IEA, an adviser to 27 nations, said global demand in 2008 will rise 2.5% to 87.8 million barrels a day.
At the MCX, crude oil for January delivery closed at Rs 3530/barrel, lower by Rs 26 (0.7%) against previous day’s close. Natural gas for December delivery closed unchanged at Rs 281.6/mmtbu, higher by 3.4/mmtbu (1.2%).