Crude oil prices fell Friday after an unconfirmed report, later denied by the State Department, that Iraqi President Saddam Hussein was considering withdrawing his forces from occupied Kuwait.
Prices of U.S. heating oil and unleaded gasoline rose, however, on heavy foreign demand, particularly in Europe where gasoline prices are much higher.On the New York Mercantile Exchange, the U.S. benchmark West Texas Intermediate crude for November delivery ended the day down 73 cents to $39.69 a barrel after trading as low as $38.50 a barrel. It added $1.70 on the week.
WTI reached a closing record high of $40.42 a barrel Thursday.
Prices were driven down by a late-morning report quoting an exiled Iraqi opposition party as saying Iraq is considering a withdrawal and that a questionnaire was being circulated asking the opinion of the ruling Baath Party, said Steve Platt, senior energy analyst with Dean Witter Reynolds in Chicago.
"We think there's no basis to it," said State Department spokesman Mark Dillen.
Home heating oil for November delivery, which was down as much as 2.75 cents during the day, finished up 0.51 cent to $1.0536 a gallon on the Merc, a gain of 2.66 cents on the week.
November unleaded gasoline ended the day at 97.13 cents a gallon.
Firm data on U.S. petroleum exports is delayed about two months. But Steel said, "Sources tell me there are not enough tankers around to take the products out."
WTI opened at $40.25 on the Merc apparently on the news the speaker of Egypt's Parliament had been assassinated, but began to sell off even before the Iraqi withdrawal report.
The Merc's week was also marked by seesaw trading in crude:
On Monday, WTI rose 96 cents to $38.95 a barrel in light technical trading with many traders off for the Columbus Day holiday and surged another $1.45 Tuesday to a Merc record closing high of $40.40 a barrel after Saddam threatened Israel with a new rocket to avenge the slaying of Palestinians in Jerusalem.
Prices fell $1.71 to $38.69 a barrel in a quiet Wednesday when traders took profits after WTI traded at a new intra-day high of $41.15 a barrel. It rebounded to a new Merc $40.42 closing high after the American Petroleum Institute reported a sharp drop in U.S. supplies for the fourth week in a row as Middle East imports continue to decline.