World oil prices sank to the lowest level in about two months this morning as the handover of power to Iraq's interim government raised hopes of less sabotage on its oil infrastructure and steady exports.
Although prices are set to dip further as OPEC has opened the taps, low gasoline stocks in the United States and persistently strong global demand are keeping the market from crumbling, analysts said.
US light crude lost 30 cents to $35.94 a barrel, the lowest since April 22nd, after sliding $1.31 yesterday, on news that Iraq had boosted exports after repairing sabotaged pipelines. London's Brent crude stood 25 cents lower at $33.45 a barrel after diving 3.6 per cent yesterday.
The United States handed sovereignty yesterday to an interim Iraqi government two days earlier than expected, seeking to avert attacks with a secret ceremony ending 14 months of occupation.
As the July 4th holiday weekend nears - a period that usually cranks up demand to seasonal highs - analysts forecast US gasoline inventories had fallen yet again last week as retailers stocked up on supplies.
A poll of seven analysts, ahead of the release of US Energy Information Administration data tomorrow, forecast an average drop of 800,000 barrels in gasoline stocks in the week to June 25th, extending a draw by that much the previous week.