Oil prices down as Zarqawi killed

The death of an al-Qaeda leader in Iraq led to a substantial decline in crude oil prices on Thursday.  Abu Musab al-Zarqawi, who has led attacks on the oil infrastructure in Iraq since the downfall of the regime of Saddam Hussein that have seen oil production there drop to about 1.8 million barrels of oil per day, was killed in an air attack outside Baghdad.  Most analysts assume that now that al Zarqawi is out of the picture, oil production will be able to increase in Iraq as attacks against facilities dwindle.

Brent crude July contracts dropped $1.16 to $69.35 per barrel late in the day on the International Petroleum Exchange in London, taking the week’s losses to 4 percent so far.  Meanwhile, in late morning trade on the New York Mercantile Exchange, West Texas Intermediate crude had lost $1.42 to $69.35 per barrel, its lowest price in two weeks.  WTI had already dropped $1.68 on Wednesday after the release of inventory data that showed increases in stockpiles of both crude oil and gasoline.