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While the American presidential election generated market speculation about which direction oil prices were headed — up on a President Bush victory, down on a John Kerry triumph, some predicted — traders said Wednesday they were more focused on existing market conditions.
Oil production in the Gulf of Mexico is recovering seven weeks after Hurricane Ivan pounded the region and traders anticipate a boost in heating oil output before the month is up. But uncertainty about international oil supplies persists:
- The chief executive of Russian oil giant Yukos said the company is “close to insolvency.”
- Iraqi oil officials said exports from the north could suffer for 10 days as a result of an attack on a key pipeline.
- And, in Nigeria, a strike scheduled for later this month is a potential threat to the country’s oil exports.
Moreover, after a sharp move lower in the past week, traders said there was a growing consensus that perhaps prices fell too far, too fast. The report of a reduced rate of production at a refinery in St. Croix, U.S. Virgin Islands, also pushed energy prices higher on Wednesday, traders said.