Crude oil fell to a two-week low as concern about supply disruptions eased after BP Plc said it will keep half of the biggest U.S. field operating and a cease-fire took hold in Lebanon.
BP said Aug. 7 it would close the Prudhoe Bay field in Alaska while it fixed corroded pipelines, causing crude prices to jump 3 percent. The company now plans to pump 200,000 barrels a day from part of the field. Fear of declining oil supply in the Middle East also lessened as Israel and Hezbollah agreed to a United Nations-brokered cease-fire.
``Losing 400,000 barrels would have been a big deal, so understandably the price has come off a bit when it's known that only half is going to be affected,'' said Anthony Nunan, assistant general manager for risk management at Mitsubishi Corp. in Tokyo. In Lebanon, ``the risk that fighting will spread to Syria or Iran is very minimal now.''
Crude oil for September delivery fell as much as 93 cents, or 1.3 percent, to $73.42 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $73.65 at 9:42 a.m. in London. Brent crude oil for September settlement fell 63 cents to $75 a barrel on the ICE Futures exchange.
Oil has risen about 21 percent this year on concerns of possible supply disruptions from Iran, the world's fourth largest producer, and export cuts from Nigeria, Africa's largest producer, because of militant attacks on oil facilities.
Four foreign oil workers were kidnapped last night at a bar in the Nigerian city of Port Harcourt, Reuters reported. Three Filipino oil workers kidnapped in the Niger delta earlier this month were released, Agence France Presse reported.
Pressure on Iran
Iran is under pressure from the United Nations Security Council to end its uranium enrichment program. The council has set an Aug. 31 deadline for Iran to accept an incentives package or face economic sanctions. The U.S. and U.K maintain that Iran is developing nuclear weapons.
BP, the world's third-largest oil company, initially said it would shut the 400,000 barrel-a-day Prudhoe Bay field, which pumps 8 percent of U.S. oil, because of pipeline corrosion. U.S. regulators last week cleared BP to keep parts of the field open subject to tight monitoring of the pipeline network.
Gasoline for September delivery fell 3.73 cents to $2.027 a gallon in electronic trading on the New York Mercantile Exchange today.
Oil reached a record last month on concern the conflict in Lebanon may spread in the Middle East, source of almost a third of the world's oil.
Middle East Capacity
``The Middle East is always a key issue for the oil industry,'' said Julian Lee, a senior analyst with the London- based Centre for Global Energy Studies. ``It's really still a story about the capacity to supply oil and importantly perhaps the spare capacity that is there to handle a crisis.''
Twenty-four Israeli cabinet ministers voted yesterday to accept the United Nations cease-fire resolution. The Lebanese government approved the cease-fire plan Aug. 12.
Israel won't withdraw soldiers until Lebanese troops are in the area to stop rocket attacks against Israel, said Tzipi Livni, Israel's foreign minister. The UN resolution, which was effective at 8 a.m. Jerusalem time, calls for Israel to withdraw ``in parallel'' with deployment of the Lebanese and extra UN troops.
``The truce is Lebanon is a pretty big deal, but it remains to be seen if it's going to hold and how successfully it can be implemented,'' Mitsubishi's Nunan said.
Hezbollah Secretary General Sheikh Hassan Nasrallah said Aug. 12 that the group has the right to fight until Israel pulls out of Lebanon. Hezbollah is backed by Iran and Syria, and is considered a terrorist organization by the U.S.
BP said Aug. 7 it would close the Prudhoe Bay field in Alaska while it fixed corroded pipelines, causing crude prices to jump 3 percent. The company now plans to pump 200,000 barrels a day from part of the field. Fear of declining oil supply in the Middle East also lessened as Israel and Hezbollah agreed to a United Nations-brokered cease-fire.
``Losing 400,000 barrels would have been a big deal, so understandably the price has come off a bit when it's known that only half is going to be affected,'' said Anthony Nunan, assistant general manager for risk management at Mitsubishi Corp. in Tokyo. In Lebanon, ``the risk that fighting will spread to Syria or Iran is very minimal now.''
Crude oil for September delivery fell as much as 93 cents, or 1.3 percent, to $73.42 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $73.65 at 9:42 a.m. in London. Brent crude oil for September settlement fell 63 cents to $75 a barrel on the ICE Futures exchange.
Oil has risen about 21 percent this year on concerns of possible supply disruptions from Iran, the world's fourth largest producer, and export cuts from Nigeria, Africa's largest producer, because of militant attacks on oil facilities.
Four foreign oil workers were kidnapped last night at a bar in the Nigerian city of Port Harcourt, Reuters reported. Three Filipino oil workers kidnapped in the Niger delta earlier this month were released, Agence France Presse reported.
Pressure on Iran
Iran is under pressure from the United Nations Security Council to end its uranium enrichment program. The council has set an Aug. 31 deadline for Iran to accept an incentives package or face economic sanctions. The U.S. and U.K maintain that Iran is developing nuclear weapons.
BP, the world's third-largest oil company, initially said it would shut the 400,000 barrel-a-day Prudhoe Bay field, which pumps 8 percent of U.S. oil, because of pipeline corrosion. U.S. regulators last week cleared BP to keep parts of the field open subject to tight monitoring of the pipeline network.
Gasoline for September delivery fell 3.73 cents to $2.027 a gallon in electronic trading on the New York Mercantile Exchange today.
Oil reached a record last month on concern the conflict in Lebanon may spread in the Middle East, source of almost a third of the world's oil.
Middle East Capacity
``The Middle East is always a key issue for the oil industry,'' said Julian Lee, a senior analyst with the London- based Centre for Global Energy Studies. ``It's really still a story about the capacity to supply oil and importantly perhaps the spare capacity that is there to handle a crisis.''
Twenty-four Israeli cabinet ministers voted yesterday to accept the United Nations cease-fire resolution. The Lebanese government approved the cease-fire plan Aug. 12.
Israel won't withdraw soldiers until Lebanese troops are in the area to stop rocket attacks against Israel, said Tzipi Livni, Israel's foreign minister. The UN resolution, which was effective at 8 a.m. Jerusalem time, calls for Israel to withdraw ``in parallel'' with deployment of the Lebanese and extra UN troops.
``The truce is Lebanon is a pretty big deal, but it remains to be seen if it's going to hold and how successfully it can be implemented,'' Mitsubishi's Nunan said.
Hezbollah Secretary General Sheikh Hassan Nasrallah said Aug. 12 that the group has the right to fight until Israel pulls out of Lebanon. Hezbollah is backed by Iran and Syria, and is considered a terrorist organization by the U.S.
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