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Oil Prices Fall 3 Percent

May 6, 2002

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NEW YORK (AP) _ The price of crude oil fell 3 percent Monday following Iraq’s decision to abandon its embargo and resume shipments of oil to the United States and other allies of Israel.

The price of June futures of light, sweet crude oil fell 80 cents, or just over 3 percent, to $25.82, in trading on the New York Mercantile Exchange. July futures lost 75 cents, a decline of 2.9 percent, falling to $25.52.

The dropoff in futures prices followed the Iraqi Cabinet’s vote Sunday to resume exports beginning at midnight Tuesday, after the country failed to win support for the embargo.

In a statement broadcast on the state-run news service, the Cabinet said its April 8 decision to temporarily suspend oil exports ``did not find a response from Arab oil-producing brothers to take similar measures so that it would succeed.″

President Saddam Hussein announced the suspension as a move to press the United States and other allies of Israel to put pressure on the Israeli government. He followed up the suspension by calling on April 22 for all Arab oil-producers to halt sales to the United States and Israel. But other countries did not support the move.

Iraq, which has a daily production capacity of 2.3 million barrels, exports about 1.8 million barrels a day under the supervision of the United Nations. The world body has maintained sanctions on Iraq since it invaded Kuwait in 1990.

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