Oil prices rise on Iraqi pipeline attacks

July 06, 2004|Associated Press

BAGHDAD -- Oil prices moved higher yesterday after new attacks on Iraqi oil lines forced the country to reduce its exports by half.

In London, contracts of North Sea Brent crude for August delivery were trading at $36.30 per barrel, up 38 cents on the International Petroleum Exchange. US markets were closed in observance of Independence Day.

Repair crews worked frantically to fix one of two key southern crude oil pipelines, officials in the state-run South Oil Co. said. The disruption, coming about two weeks after exports were halted following sabotage attacks on the two export lines, heightened concern about the security of Iraq's oil flow at a time when global spare capacity for crude is thin.

The shutdown plunged exports of crude oil from Basra to about 960,000 barrels per day, roughly half the postwar levels there.

"This is extremely disruptive," said Conrad Gerber, president of PetroLogistics Ltd., a Geneva firm that tracks tankers. As a result of the attacks and the disruption in supplies, "the market has subtracted Iraqi oil out of the equation . . . simply because of volatility in supply."

South Oil officials predicted repairs would be completed this week.