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Oil Prices Fall Again as Yukos Threat Eases

LONDON -- Oil prices slipped for the second straight session on Monday as concerns eased over exports from Russian oil giant Yukos, alleviating a little of the pressure from tight international supplies, reported Reuters.

U.S. light crude fell 28 cents to $43.67 per barrel, more than a dollar shy of Friday's record of $44.77, the highest price since the New York Mercantile Exchange launched oil futures in 1983.

Prices fell as an official at Russia's state railways said it expected no disruptions in Yukos's oil and refined oil products exports after August 10, when the firm's deadline to pay shipping fees expires.

Russia's Yukos continues to battle bankruptcy due to a multibillion-dollar tax debt case, which threatens to bring its day-to-day operations to a halt, including oil exports. The company is Russia's biggest oil-exporting firm, pumping 1.7 million barrels per day (bpd) of crude, or 2 percent of global supply.

"No supplies will be stopped after Aug. 10. We will continue to work as we have been working in the past because it is in the state's interest," Marina Kovshova, head of Russian state railways' marketing department, told Reuters.

Yukos shares shot up on Monday after a late Friday court ruling against bailiffs' seizure of its main oil unit, deemed the firm's biggest victory yet in its fight for survival.

The seizure of Yuganskneftegaz, which accounts for more than 60 percent of Yukos's total output, and the planned sale of the unit were potentially the most crippling moves threatened by bailiffs charged with collecting $3.4 billion in taxes from the company.

The United States is the biggest oil consumer in the world and was expected to increase demand by more than 2 percent, or 530,000 bpd, this year to 25.11 million bpd, according to the International Energy Agency.

Traders are also wary of security concerns in the Middle East, especially top oil exporters Saudi Arabia and Iraq, which is battling to rebuild its oil industry after the 2003 war.

OPEC, which controls around half of the world's crude exports, is pumping at the highest levels since 1979 as it tries to stem oil's relentless price rise. Output is running at 30 million barrels daily and president Purnomo Yusgiantoro said last week that the group was ready to lift production by 1 to 1.5 million bpd if deemed necessary when ministers next meet.

OPEC ministers are scheduled to meet in Vienna on Sept. 15 to review output policy, but only Saudi Arabia has any significant spare capacity to increase supply.
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