Oil prices fall after death of al Qaeda chief in Iraq

WASHINGTON -- Oil prices fell for the third straight day yesterday following the death of al Qaeda's leader in Iraq and on concerns of a slowdown in global economic growth.

Oil analysts were cautious about reading too much into the US air strike that killed Abu Musab al-Zarqawi, a Jordanian-born militant who led a campaign of suicide bombings, kidnappings, and other violence across Iraq.

Al-Zarqawi was not directly linked to attacks on Iraqi oil infrastructure, said Antoine Halff, director of global energy at Fimat USA in New York. ``As such, I don't think his death will result in a significant decline in attacks on pipelines," he said. ``Attacks on pipelines are by former Baath party insiders."

Signs of easing diplomatic tensions between Iran and the West and word from Nigerian militants that they would release foreign hostages contributed to yesterday's decline in oil prices, which followed a 2 percent dip Wednesday after US data showed rising crude and gasoline supplies.

Light sweet crude for July delivery fell 47 cents to settle at $70.35 a barrel on the New York Mercantile Exchange. The last time Nymex oil futures settled below $70 was May 24. Nymex gasoline futures fell by 2.18 cents to finish at $2.1022 a gallon.

Yet the cost of crude is still about 30 percent more than a year ago, a big reason why nationwide pump prices are averaging slightly below $3 a gallon.