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MARK AUSTIN THOMAS: Oil prices dropped below $70 dollars a barrel following news of the death of Abu Al-Zarqawi, Al Qaeda’s leader in Iraq. The man blamed for numerous killings and kidnappings was reported to have died in a US air strike yesterday. From London, Stephen Beard has more.
STEPHEN BEARD: The oil price instantly fell more than a dollar a barrel on the news. Al-Zarqawi has been one of the factors keeping prices high. He was a key figure in the Iraqi insurgency. Sabotaging pipelines, he helped disrupt the flow of crude, reducing it to well below pre-war levels.
His sudden death improves the prospects for increased oil supply from Iraq- says oil trader Rob Lachlan.
ROB LACHLAN: It’s probably the single largest thing since obvious the removal of Saddam or the capture of Saddam. But I think in terms of what it’s got to bring, it’s peace within Iraq. It brings more oil to the market which undoubtedly brings oil prices down.
But don’t expect the oil price to crash, says Lachlan. Even if peace does eventually dawn in Iraq, he reckons the insurgency has put maybe $2 or $3 onto the price of crude. The standoff with Iran and the turmoil in Nigeria are having bigger effect.
In London, this is Stephen Beard for Marketplace.