By OGJ editors
HOUSTON, May 7 -- Crude oil futures prices fell Monday after Iraq announced plans to lift a self-imposed export embargo with exports expected to resume by Wednesday.
The Iraqi cabinet voted Sunday to lift its Apr. 8 decision to suspend oil exports as a protest of Israeli military action in Palestinian areas.
Meanwhile, the United Nations Security Council is expected this week to support a new system of export controls on Iraq as part of the oil-for-aid program, US Department of State officials said Monday.
"Iraqi oil is back on the market, but the marginal effect should be minimal," said Tyler Dann, analyst with Banc of America LLC. "We may or may not see the usual short-term supply blips under the oil-for-aid rollover. . .," Dann said. The existing export controls on Iraq end May 31.
"It continues to be our opinion that the market is largely conditioned to the short-term removal of Iraqi barrels, and we don't expect a large oil market sell-off to be forthcoming on this alone," Dann added.
The June contract for benchmark US light, sweet crudes declined 50¢ to $26.12/bbl on the New York Mercantile Exchange, while the July contract lost 52¢ to $25.75/bbl. The June contract rebounded slightly in after-hours electronic trading to $26.27/bbl while the July contract held at $25.75.
Unleaded gasoline for June delivery lost 1.32¢ to 77.45¢/gal during regular trade Monday on NYMEX. Heating oil for the same month slipped by 1.55¢ to 64.98/gal. The June natural gas contract lost 15¢ to $3.60/Mcf.
In London, the International Petroleum Exchange was closed to trading on Monday because of a holiday.
The average price for the Organization of Petroleum Exporting Countries' basket of seven benchmark crudes declined 46¢ to $24.52/bbl Monday.