OIL PRICES fell for the fifth day running yesterday, as traders looked to correct last week’s record highs amid news of relative calm in Iraq.
October futures in New York crude dropped below $43 a barrel for the first time since early August, as a ceasefire was agreed in the Iraq city of Najaf. The price fell to $42.50, the cheapest spot price since July 29, before rising to $43.10, down 37 cents.
London Brent crude dipped below $40 to $39.67, the lowest level for almost a month, before climbing to $40.33, a 35-cent fall.
“A week ago, people were asking where the top in crude is and now they’re asking where the bottom is,” said Todd Clark, head of listed equity trading at Wells Fargo Securities.
Prices briefly rose after an official at Iraq’s South Oil Company said eight pipelines near the city of Basra had been sabotaged in an overnight explosion. But shipping agents said the attacks had not affected Iraqi oil exports, recently restored to two million barrels a day. Crude is flowing through Turkey for the first time in months.
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Higher than expected US gasoline stocks were also behind the movement in oil prices, analysts said.
Speculation could drive oil prices lower. “After the six-week-long move during which prices rallied by as much as $14, we believe the oil market is now in a, perhaps overdue, consolidative phase before it moves higher again,” Barclays Capital said yesterday.
Last week, September New York futures reached $49.40, a record in the 21-year history of the contract.
Purnomo Yusgiantoro, the president of Opec, said the cartel hoped prices could fall to $30 dollars a barrel. But he added that Opec must take stock of its spare oil capacity before deciding on a possible increase in production quotas.