| But within hours of the United
States detaining the former Iraqi leader, two car bombs exploded at police
stations in Baghdad on Monday, killing at least 10 people and shattering any
hope of a quick end to violence.
U.S. light crude on the New York Mercantile Exchange (NYMEX)
dropped four percent in opening trade to an intraday low at $31.74 a barrel,
but recovered to $32.13 by 2:47 a.m. EST, marking a loss of 91 cents.
London's Brent crude lost 75 cents to $29.62 a barrel.
"NYMEX crude prices plunged on the belief that guerrilla attacks on
the pipelines and oilfields will be restrained after Saddam Hussein was
captured," said Katsunori Watanabe, research director at Nihon Unicom
Corp in Tokyo.
"Fund operators, who piled up their long positions massively on
Friday, are now dumping them on expectations that there will be more stable
crude supplies from Iraq after Saddam's arrest," Watanabe said.
The United States said on Sunday it had found Saddam on Saturday, hiding
in a pit at a farm at Ad-Dawr, near his hometown Tikrit in northern Iraq.
Shamkhi Faraj, head of Iraq's State Oil Marketing Organization (SOMO),
told Reuters on Sunday that Saddam's arrest might improve security in the
north of the country, allowing crude exports from the Kirkuk pipeline.
"His supporters will fall more into line with the mainstream, which
will make it easier to secure the system (from sabotage)," Faraj said.
Repeated sabotage attacks on the pipeline carrying oil from the Kirkuk
fields to the Turkish Mediterranean have made it impossible for Baghdad to
export crude and maximize oil revenues needed to fund reconstruction.
Iraq is now exporting about 1.5 million barrels per day (bpd) of Basra
Light crude oil out of its southern Basra Oil Terminal in the Gulf. Oil
Minister Ibrahim Bahr al-Uloum said earlier this month that Iraq planned to
raise overseas sales to two million bpd by the end of the first quarter next
year. |
