Senior Staff Writer
HOUSTON, Mar. 26 -- Crude oil futures slid on the New York Mercantile Exchange Tuesday afternoon as news broke about an uprising against Iraq President Saddam Hussein in the southern Iraqi city of Basra.
Iraq's information minister denied the uprising report, but a British military official told Reuters news service that early signs suggested an uprising was under way. "We will be very keen to capitalize on it," the official told Reuters.
Analysts said the uprising renewed their previous hopes for a relatively short war in Iraq, and they noted that oil prices could have fallen more drastically had it not been for concerns regarding the civil strife in Nigeria's Niger Delta region.
The shutting of reportedly nearly 40% of Nigeria's oil output stemming from a military-tribal clash supported oil prices. Analysts are concerned about the impact on crude supplies from both Nigeria and Iraq.
United Nations officials said Tuesday that Iraq's official oil exports for the week ended Mar. 21 dropped to 443,000 b/d from 1.8 million bbl for the previous week.
Meanwhile, US Sec. of Energy Spencer Abraham has said world oil production remains steady. Energy Information Administration data showed production from the Organization of Petroleum Exporting Countries as of Mar. 20 was 26.5 million b/d, only slightly lower than the November 2002 figure of 26.9 million b/d.
"We appreciate the continued commitment by oil-producing countries to ensure stability in the world oil markets," Abraham said.
PDVSA Paraguana refining complex
Venezuelan oil company Petroleos de Venezuela SA Monday reported an explosion in the Paraguana refining complex during an attempted restart of the Cardon refinery's delayed coking unit.
The Caracas-based Petroleumworld reported that PDVSA was trying to restart Cardon refinery's 100,000 b/d delayed coker and other units that were shut down during the nation's general strike against President Hugo Chávez.
Venezuela was the world's fifth largest oil exporter before the strike, and Paraguana has been an important source of gasoline imports for the US. A PDVSA spokesman told Reuters that the 100,000 b/d cracker at the Amuay refinery in the Paraguana refining complex was functioning again as of Mar. 12. The cracker is Amuay's biggest gasoline-producing unit.
The May contract for benchmark US light, sweet crudes fell by 69¢ to $27.97/bbl Tuesday on the New York Mercantile Exchange. The June contract was down $1.08 to $26.46/bbl.
Refined products also closed lower. Heating oil for April delivery plunged 4.88¢ to 73.49¢/gal. Unleaded gasoline for the same month dropped 1.30¢ to 88.49¢/gal.
The April natural gas contract lost 17.6¢ to $5.077/Mcf Tuesday on NYMEX. In Tuesday afternoon trading, the market followed crude oil futures on news of the Iraqi uprising.
"Natural gas futures broke below the $5.08 technical support level, which could send prices down into the mid-$4 range. However, if the market levels off at about $4.92, it could turn around and bounce right back," said analysts at Enerfax Daily.
The April contract expires Thursday. Meanwhile, most of the nation is experiencing mild weather, which traders said should limit the cash market upside for the near term.
The May contract for North Sea Brent oil lost $1.28 to $24.81/bbl Tuesday on the International Petroleum Exchange in London. The day's high was 26.92/bbl and the low was $24.60/bbl. The April natural gas contract gained 2¢ to the equivalent of $2.75/Mcf Friday on IPE.
The average price for OPEC's basket of seven benchmark rose by $1.14 to $26.84/bbl Tuesday.
Contact Paula Dittrick at Paulad@ogjonline.com.