Iraqi Pipeline Sabotage Expected to Lift Price of Crude Oil
Crude oil is expected to jump higher today in New York after sabotage shut a pipeline from Iraq, delaying the return of exports to levels before the U.S.-led invasion.
The pipeline through Turkey to the Mediterranean port of Ceyhan carried almost 1 million barrels a day prior to the U.S.-led invasion of Iraq on March 20. Friday’s sabotage, 125 miles north of Baghdad, came two days after the pipeline opened for the first time since the war.
“It’s very worrying,” said John Kempler, manager of commodity risk management at National Australia Bank Ltd. in Sydney. “People have just been assuming that Iraqi crude would come on stream but you’ve still got people blowing up pipelines.”
Crude oil for September delivery rose as much as 55 cents, or 1.8%, to $31.60 a barrel in after-hours electronic trading on the New York Mercantile Exchange. The contract traded at $31.42 late Sunday afternoon Los Angeles time.
The pipeline may be out of action for as long as a month because of the attack near Baiji, the U.S. military said.
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