LONDON, 27 June 2003 — Oil prices weakened here yesterday, brought down by profit-taking and in line with a continued decline in prices for natural gas. North Sea Brent crude for August delivery was down by 39 cents in late-afternoon trading at $27.26 a barrel. In New York a barrel of light sweet crude had lost 58 cents and was going for $29.37. Market analysts attributed the trend to profit-taking that followed a spurt in prices on Wednesday, which itself was in reaction to a contraction in US crude stocks.
Also affecting the oil market was a pronounced fall in natural gas prices that became apparent after the US Energy Information Agency released its weekly estimates showing a marked increase in natural gas stocks.
The US Department of Energy and the American Petroleum Institute on Wednesday had signaled a sharp drop in crude stocks in the face of predictions from analysts of a modest rise.
Oil prices shot up by a dollar within minutes of the report.
Analysts said yesterday’s slide was not likely to be maintained, given the low level of stocks and persistent fears about the reliability of Iraqi output.
Iraq’s top oil official said yesterday that sabotage of fuel pipelines would not hit the expected return of Iraqi oil exports. But he acknowledged that they would affect the oil sector’s overall performance.
After a spate of attacks on oil and gas pipelines, acting Oil Minister Thamer Ghadhban said: “These incidents will not affect exports” deemed essential to fund the huge cost of rebuilding the shattered country. But he added: “These are serious incidents and they will affect our performance, no doubt about that.”
In Oslo yesterday Saudi Minister of Petroleum and Mineral Resources Ali Al-Naimi said his government was “very happy” with the current performance of the oil market.
“As reflected in the price, the demand and supply are in balance, inventories are at the right level and the market is stable,” he said during an official visit to the Norwegian capital. Norway is the world’s third largest oil exporter but is not a member of the OPEC.
