US sour crude oil rose, lagging oil futures in New York, as reports of damage to Iraq's northern oil fields sparked concern that exports from the country would be suspended for several more months because of repairs.
"It will take time, even once the war is over, for those Iraqi fields to get back up and running," said Doug Johnson, a Houston-based crude oil trader for ConocoPhillips. "It will also take time for refiners to replenish inventories. Supplies of sour will probably stay tight."
Iraqi soldiers damaged facilities at Kirkuk, the country's second-largest oil field, and others in the area as US troops took control, said Captain Frank Thorp, a spokesman for US Central Command in Qatar. Iraq had pumped 3 percent of the world's oil. Its exports of sour, or high-sulfur, crude oil have been halted since the US-led war began 23 days ago.
Sour MARS Blend rose US$0.43, or 1.8 percent, to US$24.04 a barrel, according to Bloomberg data. Poseidon crude oil rose US$0.43, or 1.8 percent to US$24.19 a barrel. Both are pumped in the Gulf of Mexico.
MARS Blend's discount to the benchmark West Texas Intermediate grade widened US$0.25 to US$4.10 to the benchmark from yesterday. The grade has narrowed US$1.60 since March 27 as concern about disrupted supplies from the Persian Gulf during the US-led war in Iraq spurred refiners to bid up local sour grades.
Poseidon's discount to the benchmark widened 25 cents to US$3.95 a barrel from yesterday. The grade has narrowed $1.65 since March 27.
US oil inventories fell 3.6 million barrels, or 1.3 percent, to 277.1 million for the week ended April 4, according to Energy Department figures. Supplies fell to a 28-year low of 269.8 million barrels in the week ended Feb. 7.
Supplies may fall further if the OPEC agrees to restrain output at its meeting in late April or early May in Vienna.
Led by Saudi Arabia, OPEC has raised output to cover for the loss of Iraqi exports. Daily world oil output in March rose to a record 80.3 million barrels a day.
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