VIENNA, Austria – Oil prices rose Monday as traders weighed the effects of sabotage that disrupted Iraq's southern pipeline exports against partially resumed crude production in Ecuador.
Analysts cautioned against putting too much emphasis on the Iraqi outages, saying it was too early to say how long the shortfalls in output would last. An official of Iraq's South Oil Co. (search) said exports had resumed on a limited basis, while other officials said waiting tankers were being serviced by pumps on auxillary power at a rate much reduced from normal.
Light sweet crude for September delivery rose 10 cents to settle at $65.45 a barrel on the New York Mercantile Exchange (search). The September contract expired Monday.
The front-month crude futures contract reached an all-time high of $67.10 on Aug. 12. While prices are 42 percent above year ago levels, they are still below the inflation-adjusted high above $90 a barrel, set in 1980.
Gasoline on the Nymex fell 4.23 cents to $1.8616 a gallon. Heating oil futures dropped by 1.12 cent to $1.8116 a gallon.
Natural gas futures climbed 45.3 cents to $9.564 per 1,000 cubic feet.
October Brent crude rose 40 cents to $64.76 a barrel in London after server problems forced a trading halt for several hours.
Iraqi and foreign oil officials said Iraq's oil exports were shut down Monday by a power cut that darkened parts of central and southern Iraq, including the country's only functioning oil export terminals.
Exports through the country's other main route, the northern export pipeline to Turkey, have long been halted by incessant sabotage.
Iraqi officials said sabotage was also responsible for Monday's blackout, which prevented oil from being pumped into tankers waiting at berths.
Iraqi pipelines are a frequent target for insurgents, as a large quantity of the oil heads for Western nations and disrupting the flow of crude is seen as a way to destabilize the U.S.-supported government.
But chief analyst Ehsan Ul-Haq of PVM Oil Associates in Vienna said the Iraqi supply disruption was not yet a major market factor because "it's still not quite clear whether (Iraqi) exports will be affected for a long time."
Some stability came from South America, where Venezuelan President Hugo Chavez said his country will loan oil to Ecuador until its domestic production stabilizes, easing concerns that the Andean nation's export commitments to the United States might not be met.
"Chavez's move was quite good news for the market," said chief commodities strategist Tetsu Emori at Mitsui Bussan Futures in Tokyo, Japan. "It came as something of a surprise to most because Chavez has always been bullish. But it's a welcome move."
Violent protests erupted in Ecuador last Tuesday, bringing oil production to a standstill. Production partially resumed Saturday when demonstrators and the government declared a truce.
Ecuador's state-run oil company Petroecuador (search) on Saturday restored 33,167 barrels of crude output in the northeast Amazon, but that was still about 168,000 barrels short of normal daily capacity.
Such an amount does not hurt actual supply, but the thin layer of spare capacity has markets on edge for any unexpected outage that could derail deliveries in a time of high demand.
Ecuador said production would not return to normal until October at the earliest.
Get all the stories you need-to-know from the most powerful name in news delivered first thing every morning to your inbox