Rise in oil prices hits snag, retreats

In this Dec. 19, 2014 photo, oil pump jacks work in unison on a foggy morning in Williston, North Dakota. After a rally, the prices of oil retreated on Monday, August 23, 2016, after Iraq announced boosting its output and Nigerian rebels declared a stop to attacks on that country’s oil production facilities. AP FILE

NEW YORK, United States — World oil prices slid Monday, slamming the brakes on last week’s rally as events in Nigeria and Iraq pointed to a possible surge in supplies.

In London, trade on Brent North Sea crude for delivery in October slumped $1.72 from Friday to $49.16 a barrel.

In New York trade, US benchmark West Texas Intermediate for September delivery shed $1.47 to $47.05 a barrel.

The fall came as Iraq signaled a likely increase in output from Kirkuk’s oil fields under a deal between the region and the country’s new oil minister.

Bloomberg reported that shipments from three northern oil fields could rise by 150,000 barrels a day following the resolution of a payment dispute between the Kurdistan Regional Government and the central government.

In addition, a rebel group in Nigeria has announced a conditional ceasefire and agreed to hold talks with the country’s government following months of attacks on key oil and gas facilities.

In a weekend message posted on the Niger Delta Avengers website, the group said it would “observe a cessation of hostilities,” so long as the country’s ruling party stops what it called harassment of innocent civilians.

Matt Smith of Clipper Data added that short covering partially behind last week’s surge had eased, taking upward pressure off prices.

“Oil is buffeted by US dollar gains and news that Iraq plans to boost its exports, stoking fears that the supply glut will worsen,” said Bernard Aw, an analyst with IG Markets in Singapore.

“Fresh developments about an OPEC discussion on a possible output freeze next month could provide a base for oil prices,” he told AFP.