ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, September 4, 1996 TAG: 9609040095
SECTION: BUSINESS PAGE: B8 EDITION: METRO
DATELINE: NEW YORK
SOURCE: ASSOCIATED PRESS
The turmoil in Iraq sent energy prices soaring Tuesday, but industry experts said the run-up shouldn't affect consumers when they gas up their cars and heat their homes.
Stockpiles are expected to stabilize prices, which rose about $2 a barrel overnight on reports the United Nations delayed the sale of Iraqi oil in response to that country's attacks on Kurds in U.N.-designated safe zones.
President Clinton also unleashed 27 cruise missiles at military targets in southern Iraq early Tuesday.
``This doesn't really change the supply-demand issue in the world,'' John Hervey, an oil analyst with Donaldson Lufkin & Jenrette, said of the collapsed Iraqi oil deal. He noted that even without Iraq's oil, supplies should remain plentiful in the face of declining demand.
Prices eased from their highs Tuesday. On the New York Mercantile Exchange, light sweet crude oil for delivery in October settled at $23.40 a barrel, up $1.15 from Friday. The markets were closed on Monday for Labor Day.
The benchmark crude had traded as high as $23.80 a barrel earlier Tuesday - the highest level since April. A barrel contains 42 gallons.
Refined petroleum products also shot up, but they too retreated from their day's highs.
The U.N.-Iraq pact, signed more than three months ago, would have allowed Iraq to sell $2 billion worth of oil over six months - about 700,000 barrels a day - to buy food and medicine for its people, hit hard by six years of U.N. trade sanctions over the Gulf War. Traders had anticipated the Iraqi oil would hit the markets by mid-September.
But traders noted that consumer demand is waning now that the summer driving season is over and as temperatures remain mild across the country. At the same time, they expect supplies to rise.
The American Petroleum Institute will release its weekly report on supplies today.
``My message to consumers: `Don't worry - you might even see prices go down,''' Hervey said.
Norman Rosenberg, an oil analyst with Standard & Poor's, agreed prices could ease, barring further disruptions in supplies. But he added that the market remained jittery over possible further military aggression on Iraq's part.
``You've got to worry about all the oil production in that area'' of the Middle East, he said.
Peter Beutel, president and oil analyst for Cameron Hanover Inc. in Bronxville, N.Y., agreed: ``If they don't stop them here, Iraq might keep going.''
Heating oil for next-month delivery closed at 65.07 cents a gallon, up 1.95 cents, after soaring more than 2.5 cents at one point. October unleaded gasoline settled at 62.96 cents a gallon, up 1.35 cents.
LENGTH: Medium: 59 linesby CNB