By OGJ editors
HOUSTON, Oct. 29 -- Crude oil futures settled modestly higher Monday after the so-called "war premium" eroded last week, prompting a major sell off because traders believed before the weekend that US military action against Iraq was becoming less likely.
But on Monday the outlook for a peaceful outcome to the US-Iraq conflict dimmed. President George W. Bush said the US would form its own coalition against Iraq if the UN fails to approve a US-backed resolution. That resolution would authorize military force unless Iraqi President Saddam Hussein dismantles weapons-of-mass-destruction programs.
Administration officials pushed for a UN Security Council vote by the end of the week. Meanwhile, the five council members with veto power were divided as Russia and France introduced counterproposals that did not mention military action against Iraq.
The December contract for benchmark US light, sweet crudes rose 24¢ to $27.29/bbl Monday on NYMEX, while the January contract rose 20¢ to $26.85/bbl. November heating oil rose by 0.32¢ to 73.08¢/gal.
Unleaded gasoline for November delivery dropped 0.79¢ to 85.30¢/gal Monday on the New York Mercantile Exchange. Earlier in trading Monday, it skidded to a low of 83.00¢/gal, down from hitting a contract high of 86.70¢/gal on Friday.
The November natural gas contract rose 14¢ Monday to $4.176/Mcf
In London, futures prices for North Sea Brent oil rose 22¢ to $25.68 on the International Petroleum Exchange. The December Brent contract traded in a range of $25.12-25.80/bbl.
The November natural gas contract was off 0.05¢ to the equivalent of $3.51/Mcf on IPE.
The average price for the Organization of Petroleum Exporting Countries' basket of seven crudes dropped 52¢ to $25.68/bbl Monday.