Crude oil tumbles 3.7% in New York ahead of expected rise in Wednesdays' oil inventory numbers.
June 8, 2004: 5:08 PM EDT
NEW YORK (Reuters) - Oil prices sank to their lowest level in nearly six weeks Tuesday ahead of Wednesday's government report on inventories, which analysts forecast will show rising crude oil and gasoline stockpiles in the United States.
Crude oil for July delivery tumbled $1.38, or 3.7 percent, to $37.28 a barrel on the New York Mercantile Exchange, just above its session low of $37.20, the lowest since April 29. NYMEX crude has fallen from an all-time trading high of $42.45 hit on June 2.
London Brent for August delivery lost 74 cents to $35.12.
Crude oil has tumbled nearly 10 percent from 21-year highs above $42 a barrel last week, when an increase in U.S. crude and gasoline stockpiles bolstered confidence in supplies for peak summer driving demand.
World political and economic leaders have warned that high prices could derail economic growth, and the subject is expected to be discussed at the G-8 summit of industrialized nations that began Tuesday in Georgia.
German Chancellor Gerhard Schroeder, in the U.S. for the summit, said that the wealthy nations should discuss current oil prices at the meeting as well as measures to fight speculative price increases in the oil market.
Meanwhile, European Central Bank President Jean-Claude Trichet said it was too early to say if high oil prices were permanent but the bank had to remain vigilant.
"Whatever happens, our main responsibility is to prevent second-round effects which would make higher inflation a permanent feature and which would prevent us from delivering price stability," he told an international monetary conference in London.
Global insecurity
A lack of spare world oil supply capacity as producers pump flat out to meet strong demand has left traders nervous about any supply disruption that would further strain world supplies.
Prices had risen earlier Tuesday after a source at Iraq's state oil marketing organization said attacks on Iraq's vital oil pipeline to Turkey have again halted crude flows and that Iraq's oil exports will be limited to some 1.65 million barrels per day from its southern Gulf terminals.
Iraq has consistently failed to meet its target of pre-war export levels of two million bpd as its oil facilities have been hit by technical glitches as well as security problems.
Oil analysts are also anxious about instability in Saudi Arabia, the world's largest oil exporter, where there has been a spate of attacks on Westerners living in the kingdom.
Fears of supply disruption from Africa's biggest oil exporter, Nigeria, have also bolstered prices.
The country's umbrella labor union is to hold last-minute talks with government officials late on Tuesday over a general strike planned for Wednesday, a union leader said.
Unions have threatened to hold a prolonged strike unless the government intervenes to reduce gasoline prices, saying they will disrupt the OPEC member country's oil exports by withdrawing workers from oil exporting terminals.
Oil multinationals have said they were putting in place contingency measures to minimize any disruption to Nigeria's more than two million barrels per day of crude produced.
"The market is quite delicately balanced between the fundamentals of higher supply and fears of supply disruption," said Steve Turner, analyst at Commerzbank.
O Clubeinvest.com informa que nenhuma da informação
aqui facultada deverá ser entendida como conselho ou recomendação
de qualquer tipo de transacção ou investimento.
