Crude Oil Prices Jump to Nine-Month High

Oil prices rose Wednesday to their highest level since just before the war in Iraq after a weekly report showed a sharp drop in U.S. stockpiles.

At the New York Mercantile Exchange, crude oil for January delivery closed 46 cents higher at $33.35 a barrel. The day’s high of $33.77 was the highest since March 18.

The Energy Information Administration said U.S. crude oil stocks declined for the fourth week in a row as imports slipped. Inventories fell 5.1 million barrels in the week ended Friday to 272.8 million barrels.

They are down 21.2 million barrels over the four weeks to about 29 million barrels below the five-year average.

“The big item was the crude stock draw,” oil market consultant Jim Ritterbusch said. “That’s the attention getter.”

Traders cited fresh violence in Iraq, which they said undermined the view that the capture of Saddam Hussein would halt insurgency. The head of Iraq’s North Oil Co. said the security situation remained too volatile to allow reopening of an oil export pipeline to Turkey.

Also Wednesday, Saudi Arabia said OPEC must work with rival producing countries to balance oil supply and demand, and Indonesia said it expected a surplus to develop in the second quarter of 2004.

Oil ministers from both nations and from four other members of the Organization of the Petroleum Exporting Countries gave their views on oil supplies at a global conference on liquefied natural gas trading.

OPEC’s decision earlier this month to leave oil output unchanged sent oil prices soaring. The cartel will meet again Feb. 10, when many analysts expect it to cut output because of a seasonal drop in oil demand.

Saudi Oil Minister Ali Ibrahim Naimi said his nation would work to make sure oil markets are stable.

“We believe that to achieve better stability, we must cooperate closely with other OPEC and non-OPEC producers, not only to ensure that we do not oversupply markets but to also make additional supplies available in times of shortage,” Naimi said in a speech.

But Naimi gave no hint that OPEC was taking steps to coordinate with non-OPEC producers Mexico, Russia and Norway.