Newspaper article THE JOURNAL RECORD

Energy Futures Decline amid Lessened Gulf Export Worries

Newspaper article THE JOURNAL RECORD

Energy Futures Decline amid Lessened Gulf Export Worries

Article excerpt

NEW YORK -- Crude oil plunged as the arrival of the aircraft carrier USS Nimitz in the Persian Gulf eased concern that exports from the region would be disrupted.

The carrier arrived in the Gulf ahead of schedule after Iran sent jet fighters against rebels in southern Iraq on Sept. 29, prompting Iraqi jets to enter the same no-fly zones over the country.

The actions raised concern that military tensions could escalate into a confrontation and disrupt exports from the region, home to a third of the world's oil production. "The Nimitz arrived in the Gulf so that can be seen as a sign there'll be no more problems there," said Bob Rose, senior energy trader at NationsBank in Houston. November crude oil fell 78 cents to $21.32 a barrel on the New York Mercantile Exchange. "Tensions in the region are weakening," said Rich Redash, an energy futures analyst at Prudential Securities in New York. Oil prices rose about $1 a barrel because of the tensions and now "some of that premium will have to be erased, especially with the arrival of the Nimitz." Separately, Turkish troops began to withdraw from northern Iraq after a three-week-long rebel hunting mission, according to Dubai radio reports, which cited Turkey's official news agency Anatolia. Following Mideast-led gains during the past few weeks, "heating oil and crude are overpriced, I think everybody feels that way about the market," said Tim Duehren, a refined oil products trader at Apex Oil Co. in Clayton, Missouri. On the spot market, Phillips 66, Koch Oil and NGC Oil Trading & Transportation lowered Oklahoma Sweet and West Texas Intermediate to $19.25 a barrel -- a 75-cent drop. On the Nymex, November heating oil fell 1.68 cents to 58.27 cents a gallon. November gasoline fell 1.41 cents to 59.83 cents a gallon. Heating oil fell as mild weather keeps U.S. demand for heating oil low at a time when stockpiles are well above year-ago levels, traders said. A "commitment of traders" report issued by the Commodity Futures Trading Commission on Friday exaggerated oil price declines, analysts said. The report showed investment funds and other non-commercial participants in oil futures market recently took large "long" positions by buying contracts on speculation that prices would rise. …

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