Crude Oil Prices Fall
The struggling energy sector got a shot-lived lift Friday after Iraqi Deputy Prime Minister Tariq Aziz said that the Basra refinery had been struck in a military attack by U.S.-led forces.
Following the news, February crude oil rose 3 cents to $11.40 a barrel on the New York Mercantile Exchange, but then fell to $11.26.
In London, North Sea Brent Blend crude oil for delivery in February fell 11 cents to $9.98 per barrel on the International Petroleum Exchange.
On Thursday, crude oil futures plummeted 11 percent as the market decided that the intense attacks against Iraq posed little risk to oil shipments.
U.S. Defense Secretary William Cohen said that the oil installation was a target because it was a source of illegal oil exports.The defense secretary did not say whether the Basra refinery was destroyed or how much damage was done to it.
The Basra facility is Iraq's third-largest refinery and can handle up to 126,000 barrels of crude oil a day, equal to 36 percent of Iraq's total daily refinery capacity of 350,000 barrels, according to the Energy Department.
Meanwhile, reports said Saudi Arabia will consult with Organization of Petroleum Exporting Countries colleagues, while Mexico and Venezuela will initiate talks with oil producers in their region in attempts to boost the struggling sector. This may also help the market to edge up from Thursday's steep decline.
News that Venezuela, Mexico and Saudi Arabia were unable to offer salvation to the depressed market sent crude prices plummeting 11 percent Thursday, the largest one-day drop since the Gulf War. The oil ministers met in Madrid to discuss the recent 12-year lows that crude prices have reached.
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