US crude tumbled $ 5.03 to $ 100.59 a barrel at 1753 GMT, extending losses from Friday, when the restart of an Iraqi pipeline system feeding the Basra export terminal knocked oil down from above $ 108. London Brent crude fell $ 4.23 to $ 99.54 a barrel.
Iraqi officials said operations would be back to normal by today, after the bomb attack cut production and exports by about 100,000 barrels per day. The attack marked the first disruption of exports from southern Iraq since 2004, adding to longer-term supply concerns that helped fuel an investor rush into oil and sent prices to triple digits.
“The (Iraq) supply disruption and the market reaction to it underscore how a finely balanced oil market continues to be vulnerable to supply disruptions, and that the political instability in some producer countries like Iraq and Nigeria is still far from being resolved,” Goldman Sachs said in a research report.
On Friday, oil workers from OPEC member Nigeria threatened industry-wide strike action over a dispute with ExxonMobil. Oil workers in Gabon also threatened to extend a strike that already has shut in around 90,000 bpd of the nation’s total output of around 270,000 b/d.
Easing supply concerns from the OPEC nation prompted traders to book profits from the first quarter, when oil rallied to a record $ 111.80 a barrel. “It’s the end-of-month, end-of-quarter window dressing. The technical markets stalled out last Friday and the bulls were overextended.
They couldn’t get anything going, so now they are heading for the hills,” said Stephen Schork, editor of The Schork Report. Worries that the credit crisis and the wider economic problems of the United States could drag down demand projections have weighed on prices.
