|
Iraqi oil sales lube market
|
 |
November 26, 1996: 9:54 a.m. ET
Implementing U.N. oil-for-food plan could shake up world oil industry
|
NEW YORK (CNNfn) --The resumption of limited Iraqi crude oil exports under a United Nations-sanctioned sales deal will not put pressure on winter oil markets, but prices could feel the effects it is delayed, oil analysts said Tuesday.
Iraq said Monday it was poised to export crude from its idled oil fields some time in December for the first time since a U.N. ban six years ago after it agreed to U.N. conditions for the "oil-for-food" plan.
U.N. Secretary-General Boutros Boutros-Ghali was optimistic that oil sales could start in a few weeks following Iraq's announcement that it had dropped conditions holding up the deal since mid-October, his spokeswoman Sylvana Foa said.
At the center of the debate is a May 20 agreement signed by Iraq and the United Nations that would allow Baghdad to sell $2 billion worth of oil over six months to buy food, medicine and other necessities. Iraq has been under sanctions since it invaded Kuwait in August 1990. Boutros-Ghali had suspended the plan after Iraq sent troops into Northern Kurdish areas to assist one Kurd faction.
One important remaining detail is the inspection of faulty oil monitoring equipment along the Iraq-Turkey border.
News of Iraq's impending return to the world oil market proved unsettling for oil traders and investors in energy stocks as shrinking oil inventories and winter's approach put some analysts on the alert.
"The market is becoming very volatile. It will move upward or downward with any other news -- including weather news," said Ed Morse, publisher and president of Petroleum Intelligence Weekly.
"It may put a little bit of a damper" on prices and the market, Morse said Tuesday on CNN's "Business Day." "We're not talking about a lot of oil. We're talking about half a million barrels a day. With oil prices at this level, that's less oil volume than we thought Iraq was going to have in the market half a year ago."
World oil prices Tuesday held steady as the market took the possibility of resumed Iraqi exports in stride. Traders said the news was causing underlying pressure, however. 
--Will Morton
|
|
|
|
|
 |
|
