war premium

"The war premium is coming out of the market a little bit," one trader said.

Is there a war premium in the price?

A. There are those who say that this is a weak-fundamentals oil market inflated by a war premium.

The increase was in part due to a war premium that has benefited some military-supplier stocks.

"It has wiped some of the war premium off the oil price, leaving an uncertainty premium."

"Some of that is a war premium.

Industry experts already estimate the war premium on the price of oil at $1.50 to $7 a barrel.

I don't think there is that much of a war premium because at this point demand is growing faster than supply.

SOME traders in the world petroleum market believe that oil is priced at a war premium.

The war premium ebbed once United Nations weapons inspectors arrived in Baghdad.

Analysts differ on exactly how low the price would be without the threat of war but agree that most of the "war premium" is gone.

"There is the war premium; there is fear of deflation and there are investors fleeing from the stock market."

Much of the war premium was drained from the price of oil earlier this week, when President Bush made it clear that war was imminent.

Analysts said that during the month there had been a lessening of the "war premium" built into oil prices since Iraq invaded Kuwait on Aug. 2.

"The war premium was wiped out this week," said Kevin Lawrie, a vice president at the Bank of Boston in New York.

"It seems that we're pounding the war premium back into the market," said Nauman Barakat, a senior energy trader at Merrill Lynch.

Every one of the 21 components in the index is down, except for cattle, hogs, pork bellies and oil, and that's up artificially because of the war premium.

This time, worries are not just based on the potential for harsh winter weather or the so-called war premium that could raise oil costs if the United States invades Iraq.

"The war premium is out," said John H. Kingston, the managing editor of Platt's Oilgram Price Report, a daily newsletter.

Referring to an expected spike in oil prices during hostilities, he said, "If the war premium failed to disappear, confidence, as well as inflation and corporate costs, would be adversely affected."

Red Adair Rumor But Stephen P. Piaso, a trader at Lehman Brothers, said after yesterday's close that "the war premium has returned to the market."

"It's de-escalation of the war premium, the prospect that war might be delayed," said Ann-Louise Hittle, a senior oil analyst with Shearson Lehman Brothers Inc.

Gold for February delivery on New York's Commodity Exchange plunged more than $10 an ounce in early trading as the war premium that built up in recent months was stripped away.

'War Premium' Is Back The gain yesterday follows a $2.05 increase on Monday, and traders said the price was higher than current levels of supply and demand would dictate in peacetime.

Now, fears about a war in Iraq and possible disruptions in supplies from the Persian Gulf have added a "war premium" to the price of oil, buoying it to about $30 a barrel.