[R-G] Oil Falls for a Fourth Day as Iran Talks Ease Supply Concern
critical.montages at gmail.com
Fri Jul 18 20:44:23 MDT 2008
No justice, no peace, no oil -- that's the message. -- Yoshie
Oil Falls for a Fourth Day as Iran Talks Ease Supply Concern
By Mark Shenk
July 18 (Bloomberg) -- Crude oil fell for a fourth day, capping the
biggest weekly decline in more than three years, as the Bush
administration's decision to participate in nuclear talks with Iran
eased concern of a possible military conflict.
Prices tumbled 11 percent this week on reduced tension between the
U.S. and Iran, which holds the world's second- largest oil reserves. A
slowing global economy, faltering U.S. fuel demand and rising supplies
helped push futures to their biggest weekly dollar decline ever.
``There's been a significant lessening of tensions with Iran in recent
days,'' said John Kilduff, vice president of risk management at MF
Global Ltd. in New York. ``A feared imminent attack on Iranian nuclear
facilities helped push prices to records. The meeting in Geneva is a
Crude oil for August delivery fell 41 cents, or 0.3 percent, to settle
at $128.88 a barrel at 2:44 p.m. on the New York Mercantile Exchange,
the lowest close since June 5. Futures reached a record of $147.27 on
July 11 and have risen 72 percent from a year ago.
This week's decline was the biggest in percentage terms since December
2004, when heating demand in the U.S. Northeast eased because of mild
weather. Oil closed at $42.54 a barrel that week, less than a third of
today's settlement price. The $16.20 a-barrel decline was the biggest
weekly drop in dollar terms since the futures began trading in 1983.
``There's been a lot of talk about what the administration would have
to do to lower oil prices,'' Kilduff said. ``Making a peace overture
to Iran is doing the job.''
President George W. Bush is sending the State Department's
third-ranking official, Undersecretary for Political Affairs William
Burns, to multinational talks in Geneva, the highest- level
discussions between the two countries since Iran's Islamic revolution
Iran has said it may blockade the Strait of Hormuz, the shipping lane
for a fifth of the world's crude, if its nuclear facilities are
attacked. The country is the second-biggest producer in the
Organization of Petroleum Exporting Countries.
``You have seen some of the Iran risk premium leave the market this
week,'' said Phil Flynn, senior trader at Alaron Trading Corp. in
Chicago. ``The macroeconomic news was the primary reason for the drop.
Demand is terrible.''
Saudi Arabia is OPEC's biggest oil producer and holds the world's
biggest oil reserves.
U.S. fuel consumption fell 3 percent in the first half of 2008, the
biggest decline for the period in 17 years, as high prices and a
slowing economy curbed demand, the American Petroleum Institute said
in a monthly report today.
Ten of 22 analysts surveyed by Bloomberg News, or 45 percent, said
prices will fall through July 25. Seven of the respondents, or 32
percent, said oil will rise and five forecast little change in prices.
Brent crude oil for September settlement fell 88 cents, or 0.7
percent, to settle at $130.19 a barrel on London's ICE Futures Europe
exchange, the lowest close since June 5. Prices climbed to a record
$147.50 on July 11.
To contact the reporter on this story: Mark Shenk in New York at
mshenk1 at bloomberg.net.
Last Updated: July 18, 2008 16:20 EDT
More information about the Rad-Green