Crude Oil Prices Slump as Iraq Resumes Exporting

After weeks of worsening news on the energy front, prices suddenly are going consumers’ way--at least for the time being.

Crude oil prices fell Thursday to their lowest level since Aug. 1 on expectations of a return to normal exports from Iraq, the Middle East’s third-largest producer.

Near-term futures in New York slid 75 cents to $27.99 a barrel. The price has fallen 25% from a peak of $37.20 on Sept. 20.

Iraq on Wednesday loaded a tanker for the first time this month, after an agreement with the United Nations last week on export pricing for December. Two more tankers were being loaded in Iraq on Thursday, a UN spokeswoman said.

The UN oversees Iraqi exports under sanctions imposed after Iraq’s invasion of Kuwait in 1990.

Fears of a global oil shortage have receded amid higher production and slowing economic growth. Analysts say inventories have been rising in Asia and Europe.

But the slide in crude prices could shake the Organization of Petroleum Exporting Countries, which has boosted production in recent months, analysts say.

OPEC members, who supply about 40% of the world’s oil, may cut oil output by as much as 1 million barrels a day in an attempt to keep prices from falling too far, OPEC President Ali Rodriguez said this week. OPEC meets on Jan. 17.

Meanwhile, natural gas futures prices also continued to slide, with near-term futures down $1.24 to $7.41 per million British thermal units in New York on Thursday. Gas hit a record $9.41 on Monday.

Traders said Midwest weather wasn’t as cold as expected this week, causing some speculators to sell out. Even so, gas prices may be 40% higher in 2001 than this year as inventories fall so low by the end of this winter that replenishing them will be “nearly impossible,” Cambridge Energy Research Associates said Thursday.