Oil Market Jitters Continue Amid Iraqi Sanctions Concerns

Strategic Insights -

The oil market remained under pressure Tuesday, following a sharp decline on Monday, as concerns over a possible return of Iraqi crude to the market persisted. Traders speculate that the United Nations will not lift sanctions on Iraq before the end of the year, which is contributing to the market's jitters. Iraqi Deputy Prime Minister Tariq Aziz's visit to the United Nations headquarters in New York this weekend is expected to further ease concerns, but the market remains sensitive to any news from Baghdad.

Key Takeaways:

  • The consensus among traders is that the United Nations will not lift sanctions on Iraq before year-end, contributing to the market's jitters.
  • April West Texas Intermediate (WTI) crude oil futures initially slipped 1.4 cents to $13.96/bbl on the New York Mercantile Exchange (Nymex), only 21 cents above the five-year low reached in December.
  • April North Sea Brent futures dipped 5 cents initially to $12.99/bbl on London's International Petroleum Exchange (IPE), just 9 cents above the five-year low of $12.90 hit in February.
  • Leading buyers of domestic crudes cut posted prices by 25-75, putting WTI in a new range of $12.50-$13.50/bbl.
  • Some spot crudes continued to weaken, with Dubai down 5 cents to $11.95, Saudi Arabian Light down 5 cents to $11.45, Dated Brent down 5 cents to $13.05, and Russian Urals down 5 cents to $12.55.
  • April No. 2 heating oil futures hit a new five-year low of 42.85 cents/gallon on the Nymex, with spot prompt No. 2 at New York Harbor weakening about 0.30 cents/gallon.

Sources:

  • "Washington -- The oil market's latest jitters...": The Oil Daily
  • "April West Texas Intermediate (WTI) crude oil futures...": New York Mercantile Exchange (Nymex)
  • "April North Sea Brent futures dipped...": London's International Petroleum Exchange (IPE)