Oil Prices Highest since Start of Persian Gulf War
From , Wire Reports, THE JOURNAL RECORD
Crude oil soared to its highest price since the Persian Gulf War as renewed clashes between Kurdish factions in northern Iraq rekindled concern that a broader military conflict may erupt and threaten Gulf exports.
Light sweet crude oil for November delivery on the New York Mercantile Exchange rose as high as $25.68 a barrel before settling at $25.62, up 96 cents. It was the highest close for crude oil since it settled at $32 on Jan. 16, 1991, the day before the start of the air war against Iraq.
Spot prices Monday were raised $1 per barrel by Phillips 66 Co., Koch Oil Co., Total Petroleum Inc. and NGC Oil Trading & Transportation Inc., boosting Oklahoma Sweet and West Texas Intermediate to $24 a barrel. Koch and Total priced Oklahoma Sour at $22.15 a barrel. NGC posted prices of $22.65 per barrel for Oklahoma Sour and $24.25 per barrel for Central Oklahoma Sweet. On the Merc, heating oil and unleaded gasoline also rose. November heating oil rose 2.64 cents to 74.07 cents a gallon. November unleaded gasoline rose 2.18 cents to 67.70 cents a gallon. Crude oil and its products were initially supported by British Petroleum's announcement that a fire Monday had cut back its 126,000- barrel-per-day refinery in Toledo, Ohio, said Peter Cardillo, director of research for Westfalia Investments Inc. The market's move was exaggerated because a number of traders were absent for the Columbus Day holiday, Cardillo said. John Bradberry, vice president of fuel marketer Continental Ozark Inc. in Fayetteville, Ark., also said the two issues that pressured energy crude oil and its products down last week have been discounted. First, there were signals that the United Nations-sponsored oil sale for Iraq might be progressing, Bradberry said. But that talk was put on hold by news that the Patriotic Union of Kurdistan, which is battling a Kurdish faction allied with Iraqi leader Saddam Hussein, was marching closer on Monday to Irbil, northern Iraq's principal city. There was no indication that Hussein planned to intercede. But Bradberry said, "U.N. monitors can't go there with bombs blowing up all around." More than a month after the Kurdistan Democratic Party and Iraqi forces teamed up to drive the Iran-backed Patriotic Union of Kurdistan from areas in northern Iraq, the PUK Monday recaptured the city of Sulaymaniyah and the village of Degala in a counter- offensive that began Friday, the Associated Press reported. PUK forces now are advancing on the city of Irbil. While it isn't clear if the group will try to retake the region's biggest city, speculation that such a move may ignite a conflict involving Iraq, eventually the U.S. and possibly Iran. and potentially disrupt supplies from the Gulf at a time of lean global oil inventories sent crude prices soaring. Second, there was talk last week that the U.S. Department of Energy would try to increase heating oil supplies after being pressured by Northeastern lawmakers eager to keep prices down. Secretary Hazel O'Leary did ask Venezuela to increase its production, but that's unlikely to lead to more supplies, Bradberry said. "Every refinery out there is trying to maximum its production of heating oil. They're trying to get blood from a stone at this point," Bradberry said. "There's only so much distillate you can make out of a barrel of crude." "Fighting in Iraq and lean oil inventories is a combination that makes the market incredibly strong," said Irene King, an energy analyst at J.P. Morgan Securities Inc. …