Oil prices fell more than 2.5 per cent on Monday on speculation that Iraq could export more oil if the weekend capture of Saddam Hussein put an end to sabotage of the country’s production facilities and pipelines. US light crude on the New York Mercantile Exchange (NYMEX) dropped $1.30, or 4 per cent, in opening trade to an intraday low at $31.74 a barrel, but recovered to $32.13 by 0747 GMT, 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.Shamkhi Faraj, head of Iraq’s State Oil Marketing Organisation (SOMO), said on Sunday that Saddam’s arrest might improve security in the north of the country, allowing crude exports from the Kirkuk pipeline.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 maximise oil revenues needed to fund reconstruction.Koji Suzuki, a manager at Star Futures Securities in Tokyo, said oil prices would easily turn higher if new attacks emerged. Gordon Kwan, oil and gas analyst at HSBC in Hong Kong said Monday’s price dip was unlikely to be the start of any trend downwards. Reuters
