NEW YORK (AP) – Crude futures prices settled slightly higher Monday on the New York Mercantile Exchange, sending the clear message that even Saddam Hussein’s capture couldn’t quell its determinationto move higher.<\/p>\n
Ahead of the day’s trade, market participants roundly predicted crude prices would fall at least in initial reaction to news that he was in custody.<\/p>\n
Instead, crude futures reached positive territory shortly after trade opened, defying some shallow declines at the open and a loss of more than $1 per barrel in overnight trading.<\/p>\n
“Your price being at $32 to $33 a barrel really had nothing much to do with a war premium,” said Jan Stuart, a New York analyst for Fimat USA Inc., an energy products broker-dealer.<\/p>\n
Many analysts had expected the market to treat Saddam’s arrest as a precursor to a calmer, safer Iraq – which would possibly mean a speedier recovery of the nation’s oil exports and lower oil prices.<\/p>\n
Indeed, the more measured reaction by the petroleum complex Monday surprised many, but ultimately showed crude’s resiliency beyond even the expectations of most market bulls.<\/p>\n
“This shows just how strong oil is, when even a story like this won’t keep prices down,” said Rick Bernstein, a New York assistant booth manager for NorthStar Oil Corp., an energy-brokerage firm.<\/p>\n
“I’m bullish, but this has rallied a lot quicker than I thought it would,” said Michael Guido, a New York hedge fund strategist for Barclays Capital.<\/p>\n
January light, sweet crude futures settled at $33.18 a barrel, rising 14 cents on the day. The front-month contract didn’t even graze last session’s low, but topped its high by 12 cents.<\/p>\n
On London’s International Petroleum Exchange, January Brent settled down 5 cents at $30.32 a barrel.<\/p>\n
Analysts say what remains to be seen is whether Saddam’s arrest will temper the frequency of attacks in Iraq, which has the world’s second-largest proven oil reserves next to Saudi Arabia.<\/p>\n
Saddam’s capture didn’t prevent two bombings of police stations in Iraq Monday morning and may even lead to a spate of retaliatory assaults, market-watchers say.<\/p>\n
Repeated attacks on the nation’s northern oil pipeline by saboteurs seen as loyal to Saddam have limited the nation’s oil-export outflows. Iraq is producing about 2 million barrels a day of oil, about 80 percent of its prewar total. Output from Kirkuk, in northern Iraq, is only about 200,000 barrels a day, but could rise to 900,000 barrels a day if the pipeline to the oil-export terminal at Ceyhan, Turkey, were secured, Iraq’s State Oil Marketing Organization has said.<\/p>\n
In assessing the market’s wholesale dismissal of Saddam’s capture, Kyle Cooper, a Houston analyst for Citigroup, remained wary.<\/p>\n
“It seems the market thinks it’s not going to have much of an effect, but quite honestly, I disagree,” he said. “I have a hard time believing it isn’t going to have any effect – at least psychologically – on those who support (Saddam).”<\/p>\n
The next several days may be pivotal in gauging whether Saddam’s removal actually helped improve Iraq’s stability, Cooper said, echoing the sentiments of other analysts.<\/p>\n
“Terrorists may want to show they’re still viable,” he said.<\/p>\n
But in the long run, Saddam’s role may not matter much when compared with shrinking commercial U.S. oil inventories, increasing cold-weather demand for heating fuels and expectations that the Organization of Petroleum Exporting Countries may cut its output further in February, analysts say.<\/p>\n
“No one cares about Saddam, and they shouldn’t,” Guido said. “This is clearly an immediate reaction to where the market is at.”<\/p>\n
On the Nymex, January heating oil futures settled down 0.50 cent at 92.06 cents a gallon, while gasoline for the same month settled up 0.24 cent at 90.28 cents a gallon.<\/p>\n
Natural gas for January delivery plunged 26.7 cents to settle at $6.954 per 1,000 cubic feet.<\/p>\n
Ample distillate inventories, which include heating oil and diesel fuel, are putting pressure on heating oil prices, analysts say. Conversely, gasoline futures are reflecting crude’s momentum.<\/p>\n","protected":false},"excerpt":{"rendered":"
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