Oil prices slid below $28 on Monday, June 18, compounding heavy falls in the previous session, amid prospects of a resolution to a UN-Iraq stand-off that has deprived world markets of Iraqi crude. A barrel of Brent North Sea crude for August delivery fell to $27.95, after closing at $28.12 on Friday. In New York, the July light sweet crude contract slipped 53 cents to $28.51 a barrel on Friday.
Dealers said that the market was now factoring in probable UN failure to introduce a new set of 'smart' sanctions against Baghdad, and would thus decide just to roll over the existing regime for another six months. This would likely prompt Iraq to resume exporting its crude to world markets.
"It looks like the UN will fail with what they're trying to get from the Iraqis, and they will go for a six-month oil-for-food programme pretty much as we had before," said Adam Stone, a dealer with the Ed and F Man brokerage.
Iraq suspended exports on June 4 to protest plans to modify the sanctions regime originally imposed in response to its invasion of Kuwait in 1990.
An Anglo-US plan for smart sanctions aims to target sanctions more accurately, lifting the embargo on civilian goods while stamping out illegal trade in contraband oil.
But the plan has met with opposition and consensus could be difficult to achieve ahead of an early July deadline, analysts say. — (AFP)
© Agence France Presse
© 2001 Mena Report (www.menareport.com)