Oil prices fall further as markets ignore Iraq raids

THE CONTINUED bombing raids on Iraq failed to register in the financial markets yesterday, where attention was firmly focused on the impeachment vote in the US House of Representatives.

Crude oil prices continued to flounder as it became apparent the raids had not halted the flow of Iraqi oil exports.

Oil prices slid by 11 per cent in New York late on Thursday night, while on London's International Petroleum Exchange, February Brent crude dipped back below $10 a barrel in afternoon trade.

Nick Stamenkovic, chief economist at Bank Austria Creditanstalt Futures, said: "With the supply overhang and the weak global economy, the outlook for the oil price continues to be poor."

Stock markets were unperturbed by the strikes on Iraq, and major European bourses closed higher, spurred on by gains in Far Eastern markets overnight and a strong opening on Wall Street.

In London, the FTSE-100 index broke through the 5,700 barrier, closing up 1 per cent at 5,741.9, as fund managers embarked on a year-end buying spree.

One trader said: "It's quite common for fund managers to start buying heavily at this time of year to try and improve their showing by year- end."

Bank stocks were among the main gainers on the London Stock Exchange, while most oil stocks tracked crude prices lower. BP closed down 10p at 878.5p, while Shell ended the day down 0.25p at 358p.

For most financial markets, particularly the foreign exchange markets, the main focus of attention was the impeachment vote.

Concern about the political future of President Bill Clinton weighed heavily on the dollar, which had fallen another 1.3 yen to 115.08 yen by lunchtime in New York.

Impeachment concerns also hit US government bonds for the second successive day, with the yield on 30-year Treasury bonds up 2 basis points at 5.03 per cent during afternoon Wall Street trade.

Mr Stamenkovic said: "If President Clinton does get impeached it will make the markets even more nervous."