NYMEX Crude Bounces On Iraq, Strong Gasoline
NEW YORK, April 16 - NYMEX crude and refined products ended with hefty gains
Thursday as the market again grappled with issues affecting Iraq and their perceived
effects on the flow of oil.
''The market moved up and stayed strong throughout the session,'' in reaction to news
that Iraq's ruling party was seeking an end to U.N. sanctions against the country, said
Energex Ltd's Dominick Cagliotti.
Any possible conflict that may arise from this development is viewed by the market as
bullish because any disruption on the normal oil flow in the Middle East could strangle
supplies.
Reports about problems in six U.S. refineries that have precipitated varying durations of
outage and rumors of glitches in two others were also price-supportive, Cagliotti added.
At the back of overnight trading gains, NYMEX May crude settled at $15.90 a barrel,
adding 44 cents on the day. Front-month crude hit $16.00, the day's high, in early
afternoon and eased a bit toward the close.
The May gasoline contract settled at 52.75 cents a gallon, up 1.30 cents, as news of
refinery woes, big demand seen in the coming driving season and residual effects of
stock draws highlighted in weekly inventory reports combined to inspire bullish
sentiment.
May heating oil benefited from the market's rise, settling at 44.60 cents a gallon, a gain
of 0.98 cent.
''From a technical standpoint, the market slayed a lot of dragons today,'' said a Texas
trader.
''The market has been under pressure for quite some time and today the longer-term
indicators turned positive,'' he said.
The pressure has been eased and ''I see more moves on the upside,'' he added.
A report by U.N. Secretary General Annan Kofi showing that Iraq can produce only $3
billion worth of crude for any six months in 1998 even if its damaged oil facilities were
repaired has lent support to crude, traders said.
The U.N. approved in February an increase in Iraq's oil sales to $5.256 billion for every
six months from the current $2 billion, but Iraq has said it can only produce $4 billion.
''The thought that Iraq's crude producing and exporting capabilities are less than
previously thought is at least somewhat bullish, enough to feed the price rebound from
the range bottoms,'' said a Houston based analyst.
International sanctions, including an oil embargo, were placed on Iraq when Saddam
Hussein invaded Kuwait in August 1990 in a move that precipitated the Persian Gulf
War.
''The pressure on the market has been alleviated for the moment,'' the Texas trader
added. |
