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War gloom pushes oil prices past $30
Friday, 28 March 2003, 20:30 IST
LOS ANGELES: Gloomy reports on the condition of Iraq's dilapidated oil infrastructure and the possibility that the war could last for months have brought the bulls back to the energy market, reports UPI.
May crude futures surged above $30 per barrel on the New York Mercantile Exchange Thursday following the release of a pair of reports.
One declared that President Saddam Hussein's regime planned to fight it out inside Baghdad while the other said that getting Iraq's shop-worn oil facilities back on line would be an even more daunting job than had been expected.
"It is estimated that it will cost $1 billion to get the oil infrastructure to allow the field to yield its capacity of 1.8 billion barrels a day," British Air Marshall Brian Burridge told reporters in Qatar.
"We expect Iraq to be exporting oil within three months."
The prospect of the U.S. still at war and Iraqi oil still off the market during the summer driving season helped send May crude up a strong $1.75 to $30.37 per barrel. April gasoline rose by more than a nickel to 97.47 cents per gallon.
Tumbling futures prices last week had brought some temporary hope to motorists who have been paying top dollar for gasoline during the winter months when demand is traditionally low and refiners are busy filling their inventories with fuel for summer.
"With the high level of imports seen last week, U.S. commercial crude oil inventories increased by 3.7 million barrels," said the U.S. Energy Information Administration.
The chronic low inventories have kept retail gasoline prices at levels well above last year.
The Energy Information Administration (EIA) said Thursday that the average price for a gallon of regular was $1.69, nearly 4 cents below last week but around 34 cents above last year.
Exacerbating the situation in the near term has been political upheaval in Venezuela and Nigeria, both of which are major suppliers of crude to U.S. refiners.
Despite repeated White House denials that the war with Iraq is about control of oil, getting the Iraqi fields back on line as soon as possible is of keen interest to the U.S. and Britain.
Bringing more oil on to the market would serve to both lower prices and provide revenues to pay for the rebuilding of Iraq after more than 10 years of economic sanctions.
Source: IANS
Source: IANS