Newspaper article THE JOURNAL RECORD

Crude Oil Drops, Others Follow

Newspaper article THE JOURNAL RECORD

Crude Oil Drops, Others Follow

Article excerpt

Crude oil prices fell as concern eased that tensions in the Persian Gulf, which boosted prices 3.8 percent Friday, would disrupt exports.

Prices rose Friday on expectations that evidence would emerge during the weekend linking Iran's government to the 1996 bombing of a U.S. military housing complex in Saudi Arabia.

When the evidence didn't appear, prices fell as traders' attention returned to ample U.S. crude oil inventories, which are at their highest level since June 1995. "The market ran up Friday on Middle East fears and they failed to materialize," said Bill O'Grady, an energy analyst at A.G. Edwards & Sons in St. Louis. "There wasn't anything over the weekend suggesting Iran was linked to the bombing. This thing rose on air, and now it's starting to go down." June crude oil, which expires at the close of trading today, fell 53 cents to $21.59 a barrel at the close of trading on the New York Mercantile Exchange, after gaining 82 cents Friday. On the spot market Monday, prices were reduced 50 cents per barrel by Koch Oil Co. and Phillips 66 Co. Koch priced Oklahoma Sweet and West Texas Intermediate at $19.50 a barrel. Phillips said it would pay $19.75 a barrel for the two crudes. June gasoline fell 0.66 cent to 65.21 cents a gallon, after rising 1.83 cents Friday. June heating oil fell 0.55 cent to 57.92 cents a gallon, after rising 1.99 cents Friday. Traders now are awaiting a report on U.S. oil inventories, to be issued after trading today by the American Petroleum Institute. "I think they'll be watching crude oil" inventories, said O'Grady. "We're certainly seeing a lot of imports. I wouldn't be surprised to see a 2 to 3 million-barrel increase." Crude inventories rose almost 7 million barrels during the week ended May 9, more than expected, to 322.63 million barrels, the previous API report showed. Estimates of gasoline stockpiles and demand are a key influence on petroleum prices at this time of year, before the peak summer driving season. …

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