07-17-2006, 05:26 PM
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Traders at the New York Mercantile Exchange.
On Monday, July 17, 2006, Crude oil prices plunged more than $1 a barrel Monday on a rumors of moves toward peace
in the Middle East and in Iran's nuclear standoff with Western nations.
AP Photo/Mark Lennihan
Oil prices slide, settle at $75 a barrel
© 2006 The Associated Press
Crude oil prices fell more than 2 percent Monday as world powers stepped up efforts to broker a truce between Israel and militants in Lebanon.
But perhaps the bigger surprise in the energy complex was the sharp decline for natural gas futures, which plunged by almost 9 percent despite a heatwave that drove-up demand for gas-fired power plants.
"It goes to show you there's no sure things in these markets," said Man Financial broker Andrew Lebow, who attributed the selloff in natural gas to traders' focusing on longer-term forecasts calling for cooler weather.
Even if an immediate Middle East cease-fire is not reached, analysts said the fact that the Israel-Lebanon violence has not spread in the region should help contain, if not sharply reduce, oil prices. The market's biggest fear is that Iran, a financial backer of Hezbollah and OPEC's No. 2 supplier, could be drawn into the conflict.
"At some point the market is going to become immune to every little attack," said BNP Paribas Commodity Futures broker Tom Bentz.
Also pushing prices lower were somewhat conciliatory remarks by Iran over the weekend relating to its nuclear standoff with the West. Iran said Sunday that Western incentives to halt its nuclear program were an "acceptable basis" for talks, and it is ready for detailed negotiations.
Light sweet crude for August delivery slid $1.73 to settle at $75.30 a barrel on the New York Mercantile Exchange.