NEW YORK, April 5 (UPI) -- An influential Iranian cleric's call for a month-long oil boycott of the West seemed to fall on deaf ears Friday as crude futures on the New York Mercantile Exchange went into a full retreat that was slowed only by an escalation of labor problems in Venezuela.
The front-month May contract closed 37 cents lower at $26.21 per barrel Friday after nearly tumbling through the $25 barrier. May had breached $28 early in the week, however it appeared less likely by week's end that OPEC would follow through with calls from Iraq and later from Iran to cut off crude supplies to the United States.
"The oil belongs to the people and can be a weapon against the West and those countries who support the savage regime of Israel," Ayatollah Ali Khamenei said in a sermon during Friday prayers in Tehran.
The ayatollah's call, however, was tempered by his suggestion that the boycott only last one month, and there was no indication that OPEC was willing to go along with even a limited interruption of their revenue stream.
Analysts had opined that the NYMEX rally early in the week was driven by larger buyers willing to stock up at higher prices rather than risk being caught in a supply squeeze with the summer driving season approaching. Concerns about tight supply started to fade at midweek and brought out sellers looking to do some profit taking.
The slump also affected London's International Petroleum Exchange where May crude slipped 42 cents to $26.38 per barrel.
Refined products on NYMEX also rallied late in the day and made up nearly all of some significant losses seen earlier in the day. Heating oil and gasoline for May both closed around a half-cent per gallon lower on the day.
The bulls were given a modest boost in the afternoon by news that a festering dispute between Venezuela's national oil company and its oil workers union was beginning to produce scattered job actions that could lead to an overall strike that would pose a serious threat to exports.
Petróleos de Venezuela, S.A. is a major exporter of crude to the refineries along the U.S. Gulf Coast and also has its own huge refinery system that churns out 200,000 barrels per day of gasoline of clean-burning reformulate gasoline, about a third of which is exported to the United States.
Analysts had opined that the NYMEX rally early in the week was driven by larger buyers willing to stock up at higher prices rather than risk being caught in a supply squeeze with the summer driving season approaching. Concerns about tight supply started to fade at midweek and brought out sellers looking to do some profit taking.
The slump also affected London's International Petroleum Exchange where May crude slipped below $26 pr barrel.
NYMEX heating oil for May was 1.66 cents lower at 67 cents per gallon while May gasoline lost more than 3 cents in early trading and slipped below 79 cents per gallon.
(Reported by Hil Anderson, UPI Chief Energy Correspondent)
