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
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
There was no indication that Hussein planned to intercede. But
Bradberry said, "U.N. monitors can't go there with bombs blowing up
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-
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
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. …