Crude prices lower for third straight day as Iraqi situation stabilizes
The price of oil declined for the third straight day Monday on signs that the insurgency in Iraq has been slowed and may be turned back.
Benchmark West Texas Intermediate crude for August delivery fell 37 cents to close at US$105.37 a barrel on the New York Mercantile Exchange. The contract has fallen for three consecutive days and five out of the last six trading days after closing at 10-month high of US$107.26 on June 20.
Brent crude, used to price international oils used by many U.S. refineries, fell 94 cents to close at US$112.36 a barrel in London.
The price of oil rose in recent weeks as investors worried that the surge of violence in OPEC's second-largest exporter might reduce global crude supplies.
While the situation in Iraq is far from resolved, it appears less likely that the insurgency will spread to important oil-producing regions in the south.
"Additional price gains have proven extremely difficult especially with Iraq seeing some evidence of (a) semblance of stability," wrote energy analyst Jim Ritterbusch in a report Monday. He also noted that oil prices were pressured by reports that Libyan crude production is edging higher and that the country's biggest export terminal could reopen in August.
On Tuesday, a preliminary reading of Chinese factory activity will give investors the latest gauge of economic activity â€” and potential oil demand â€” in China, the world's biggest oil importer.
In other energy futures trading on the Nymex, wholesale gasoline fell 3.1 cents to close at US$3.043 a U.S. gallon (3.79 litres), heating oil fell 2.8 cents to close at US$2.975 a gallon and natural gas rose 5.1 cents to close at US$4.44 per 1,000 cubic feet.
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