Market watch, Nov. 8

Production uncertainties in Nigeria and Iraq helped boost international oil futures Tuesday, while cold weather forecasts pushed up home heating oil in the US market. Iraq is again signaling that it may halt its crude exports if the United Nations doesn't approve its request to switch the payment currency to euros rather than dollars.


Production uncertainties in Nigeria and Iraq helped boost international oil futures Tuesday, while cold weather forecasts pushed up home heating oil in the US market.

Iraq is again signaling that it may halt its crude exports if the United Nations doesn't approve its request to switch the payment currency to euros rather than dollars.

Although under UN trade sanctions since its 1990 invasion of Kuwait, Iraq has recently been shipping nearly 3 million b/d under a humanitarian oil-for-food program. Any disruption of those exports could trigger a serious shortfall of oil in the currently tight markets, analysts said (OGJ Online, Oct. 26, 2000).

Meanwhile, traders are awaiting further information on reports earlier this week that pipeline damage might curtail exports of Nigeria's Bonny crude by as much as 250,000 b/d.

On the New York Mercantile Exchange, the December contract for benchmark US light, sweet crudes rose by 54� to $33.40/bbl, while the January contract was up 60� to $32.29/bbl. But both contracts retreated in after-hours electronic trading to $33.32/bbl and $32.20/bbl, respectively, when the American Petroleum Institute reported after the market closed that US oil stocks grew by 35,000 bbl last week.

The December contract for home heating oil was up 3.24� to 94.93�/gal on the NYMEX, while unleaded gasoline for the same month increased 0.88� to 89.1�/gal Tuesday. Natural gas for December delivery surged by 23.2� to $5.08/Mcf.

In London, the International Petroleum Exchange rallied behind the NYMEX lead with the December contract for North Sea Brent oil gaining 39� to close at $31.68/bbl. The December natural gas contract was up 1� to the equivalent of $3.82/Mcf on the IPE.

The average price for the Organization of Petroleum Exporting Countries' basket of seven crudes was up 50� to $30.76/bbl.

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