Oil declines from record highs of $88 bbl but fears about Turkish move into Iraq continues to worry traders; inventory report awaited
Released on: October 17, 2007, 7:32 am
Press Release Author: Tri-Coastal Oil and Gas Ltd.
Industry: Energy
Press Release Summary: Seoul, Republic of Korea, Oil prices retreated Wednesday from record highs above $88 a barrel overnight amid expectations a fuel report due later in the day would show U.S. crude and gasoline stocks rose last week.
Press Release Body: Still, prices remained supported by concerns a Turkish incursion into Iraq in search of Kurdish rebels could disrupt crude supplies.
Light, sweet crude for November delivery dropped 32 cents to $87.29 a barrel in Europe in electronic trading on the New York Mercantile Exchange.
The contract rose $1.48 to close at a record $87.61 a barrel Tuesday in the U.S. after climbing as high as $88.20, a trading record.
December Brent crude dropped 45 cents to $83.10 a barrel on the ICE futures exchange in London.
Turkey\'s parliament is expected Wednesday to agree that the government can launch a cross-border attack into Iraq sometime over the next year.
The government has said an offensive against the rebels in northern Iraq will not immediately follow the authorization.
An incursion would threaten the pipeline that runs from Kirkuk, in Iraq, to the Turkish export terminal of Ceyhan.
While exports of crude from Kirkuk to Ceyhan have been sporadic since the U.S.-led invasion of Iraq in 2003, oil has been flowing the past two months and in recent days was being shipped at a rate of nearly 500,000 barrels a day, Dow Jones Newswires reported.
Oil prices have also been driven higher by recent reports from the Energy Department, the International Energy Agency and the Organization of Petroleum Exporting Countries suggesting oil supplies are flat or falling as demand is growing.
Tri-Coastal Oil and Gas ltd. spokesperson James Bennett also noted a \"bottleneck in the refining sector\" was supporting prices, adding, \"the increase in world crude distillation capacity lags behind the growth of oil product demand in 2007.\"
Despite the gains, the price of oil is still below inflation-adjusted highs hit in early 1980.
Depending on the adjustment, a $38 barrel of oil in 1980 would be worth $96 to $101 or more today.
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