By OGJ editors
HOUSTON, Oct. 28 -- Oil futures prices plunged on world markets Friday, and traders said the so-called "war premium" eroded before the weekend as the chances of a US military conflict with Iraq appeared to be declining in light of negotiations in the UN Security Council.
During the weekend, the Gulf Cooperation Council (GCC) pledged to secure sufficient quantities of oil for global markets given concerns about tensions in the Middle East. The six members of the GCC together supply about 20% of the world's oil needs.
The oil and energy ministers of OPEC members Kuwait, Qatar, and Saudi Arabia conferred during a 1-day meeting in Muscat, Oman, along with non-OPEC members Oman and Bahrain. Afterward, they told reporters that they had studied the international oil market situation along with supply and demand forecasts.
"The regional emergency plan is to cover any shortfall, if there is any, from the member states," said Mohammed bin Hamad Al Ramahi, Omani oil and gas minister. The group issued a statement pledging that the GCC was ready to provide sufficient oil supplies to world markets if needed in case of any type of emergency.
Al Ramahi clarified that GCC was not anticipating an emergency, and he said no political situation was discussed.
Meanwhile, the gasoline futures price climbed upon last week's reports that US gasoline inventories are below historical levels, analysts said. Unleaded gasoline for November delivery jumped 1.92¢ to 86.09¢/gal Friday on the New York Mercantile Exchange.
The December contract for benchmark US light, sweet crudes dropped by $1.15 to $27.05/bbl Friday on NYMEX, while the January contract lost $1.14 to $26.65/bbl. November heating oil plunged by 3.213¢ to 72.76¢/gal.
The November natural gas contract fell 10.5¢ Friday to $4.03/Mcf
In London, brokers said futures prices for North Sea Brent oil lost $1 as technical selling took prices below $26/bbl on the International Petroleum Exchange, as traders looked for fresh news in US-Iraq relations. The December Brent contract closed at $25.46/bbl, after trading in a range of $25.35-26.62/bbl.
The November natural gas contract was off 8¢ to the equivalent of $3.56/Mcf on IPE.
The average price for the Organization of Petroleum Exporting Countries' basket of seven crudes dropped 54¢ to $26.20/bbl Friday.
