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Oil prices retreat again
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December 8, 2000: 7:39 a.m. ET
Brent crude falls back to below $27 a barrel as Iraq, supply issues loom
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LONDON (CNNfn) - Crude oil prices resumed their retreat Friday, continuing to slide amid new signs of oversupply in the market and expectations that Iraq may restart U.N.-monitored oil exports.
London Brent blend for January 2001 delivery eased 58 cents to $26.89 a barrel, taking its slide in the past seven trading days to $5.79, or nearly 18 percent. Oil earlier this week fell as low as $26.70, the lowest level seen since late July.
The slump has coincided with plans by several European oil companies to lower pump prices of gasoline and diesel fuel, although one company said its action wasn't a reaction to falling crude prices.
Tom Kearney, a spokesman for Royal Dutch Shell in London, said it cut prices this week "purely in response to competitive pressures in the market."
He added that it usually takes up to three weeks for lower crude prices to filter through to consumers in the form of lower prices at the pumps.
Traders tied the latest declines in the market for crude in part to news that United Nations oil overseers had recommended the Security Council approve price proposals for Iraqi sales of oil.
If the prices are approved Iraq can resume exports at its two main outlets -- Ceyhan in Turkey and Mina al-Bakr on the Gulf. It suspended exports at the end of last month because of a dispute with the U.N. over the selling price of Iraqi oil.
Still no Iraqi exports
Industry sources said the two terminals remained at a standstill Friday, the eighth day that Iraq has failed to supply its usual daily output of 2.3 million barrels, 5 percent of internationally traded oil. The U.N. sanctions committee has until late Friday London time to object to Iraq's proposals.
Aside from that, oil industry analysts cited a general oversupply in the market, which has brought back crude prices within the $22 to $28 per barrel target range set by industry cartel OPEC earlier this year.
Tim Whitaker, an oil industry analyst with Lehman Brothers in London, told CNNfn.com, cited recent reports from the U.S. Department of Energy and the American Petroleum Institute as giving signs that inventories of oil building back up, after steady falls in the third quarter of 2000.
Whitaker added that he felt the prospect of renewed Iraqi exports was not a major factor in the market's weakness.
"The fact is that OPEC this year has raised output a lot, and prices will continue to go down until OPEC does something about it," Whitaker said. He added the cartel has raised its daily production quota to 27 million barrels from just 23 million at the start of the year. Meanwhile, demand has grown by only 1 million or 2 million barrels in than time.
-- from staff and wire reports 
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