USA: Anthony Grisanti, a gasoline trader at GRZ Energy, says Zarqawi's death is bound to get Iraq's oil industry up and running.

Record ID: 344380

  • Title: USA: Anthony Grisanti, a gasoline trader at GRZ Energy, says Zarqawi's death is bound to get Iraq's oil industry up and running.
  • Date: 9th June 2006
  • Summary: (BN13)NEW YORK CITY, NEW YORK (JUNE 8, 2006) (REUTERS) VARIOUS OF TRADERS ON FLOOR OF NYMEX
  • Embargoed: 24th June 2006 13:00
  • Keywords:
  • Location: Usa
  • Country: USA
  • Topics: Energy
  • Reuters ID: LVA22G6VZZ98D7S0WW4INMNKX56L
  • Story Text: U.S. crude oil futures ended lower on Thursday (June 8) as news that U.S. forces killed al Qaeda's leader in Iraq raised some hope that security would improve in the oil-producing country.
    Crude for July delivery last traded down 52 cents at $70.30 on the New York Mercantile Exchange, trimming losses after dropping as low as $69.10 which marked the cheapest since May 22.
    In London, July Brent crude traded down $1.02 at $68.17.
    NYMEX July gasoline slid 5.40 cents to $2.07 a gallon, with July RBOB down 4.50 cents to $2.2175. July heating oil was down 3.14 cents to $1.964.
    Abu Musab al-Zarqawi's death in an American air strike in Iraq raised hopes that sabotage against the oil industry there would diminish, leading to more production and exports.
    Anthony Grisanti, a gasoline trader at GRZ Energy, says Zarqawi's death is bound to get Iraq's oil industry up and running.
    "Zarqawi's death for the oil market now, obviously, is very good. It should stop the attacks, but overall for the future what you should see come out of that as long as the attacks are low, that Iraq should be able to get their oil industry back on line. I'm not saying that it's completely off line, but I'm saying that the numbers coming out of it aren't what we expected. And that's because the insurgents have done a good job of attacking all those facilities. So if you get that to stop, hopefully they can start revamping their facilities a little bit, modernizing them, and we can get 2.5 million, 3.5 million barrels a day out of Iraq."
    Meanwhile, in Iran, President Mahmoud Ahmadinejad said on Thursday (June 8) threats would not work in any talks to solve a dispute over his country's nuclear program. But he also said Iran was ready to clear up "misunderstandings" with the world.
    Gristani says the combination of Ahmadinejad's statements and Zarqawi's death is bound to have a positive effect on oil markets.
    "Well, the oil prices have been going down for quite a few sessions here. Number one is the Iran situation. Zarqawi's death is very positive for these markets, but most people realize that Zarqawi dead doesn't mean terrorism or the attacks will stop in Iraq. They might slow down a little bit, they might be disorganized, it's the same as if bin Laden was killed. We don't expect terrorism to end once bin Laden is dead."
    Gasoline's weakness stemmed from Wednesday's U.S. government inventory data showing supplies fell for the sixth week in a row last week.
    News that a heavy inflow of gasoline cargoes from Europe had caused a pile-up of trans-Atlantic vessels waiting to unload in the New York Harbor kept traders cautious.
    The impending switch by the Goldman Sachs commodity index fund from the current gasoline futures contract -- reformulated unleaded that used to be made with the additive MTBE -- to the reformulated gasoline blendstock for oxygenate blending, or RBOB, contract -- which is used to make gasoline with ethanol -- was also bearish for gasoline, market sources said.
    Signs of slowing demand growth and hefty stockpiles in the United States pressured energy prices. Amid inflation worries, former Federal Reserve Chairman Alan Greenspan said high oil prices were starting to have an impact on the U.S. economy.
    But Gristani says he expects that these world events will eventually lead gasoline prices to fall too.
    "Right now oil is about $69.30 (USD) a barrel. The $70 (USD) is a big psychological number. If it settles through there I expect it to trade even lower than $69.30 (USD), probably, possibly even the $68 number. As far as gasoline goes, we've broken through some key support levels at $2.06, $2.07 and $2.08, the pressure is on that market. That's kind of what let us up, especially let crude oil up to $70 - $75 (USD) a barrel. So, as long as the gasoline market stays low, which I think it will, because of the demand situation, because of Iran, because of Zarqawi, I believe crude oil, or I'm sorry gasoline, could get down to $1.88 (USD) per gallon."
    Prices fell sharply on Wednesday after the U.S. Energy Information Administration said domestic crude stocks rose by 1.1 million barrels to 346.6 million barrels last week, putting inventories 14.1 million barrels higher than a year ago.
    Gasoline stocks rose by 1 million barrels to 210.3 million barrels, even as production and imports declined. Implied demand slipped to 9.37 million bpd.
    Distillate stocks rose by 1.8 million barrels to 120.7 million barrels.
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