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Oil prices fall on Zarqawi death Oil prices have dropped sharply to below $70 a barrel on news of the death of the militant leader Abu Musab al-Zarqawi in Iraq. Two key oil prices, for July delivery of US light sweet crude and UK Brent, fell to $69.54 and $68.35 respectively. Prices had already been on the slide because of healthy oil stocks in the US and an easing of tensions with Iran. On Wednesday former US central bank chief Alan Greenspan had warned that oil prices were hurting the US economy. Jordanian-born Zarqawi was seen as the leader of al-Qaeda in Iraq, and a figurehead of the Sunni insurgency. His group has been blamed for numerous kidnapping of both Iraqis and Westerners. "The hope is that with the removal of the terror leader in Iraq, the Iraqi situation will stabilise faster and future oil supply could increase," said Victor Shum, an energy analyst with Purvin & Gertz. However, Edward Meir of MAN Financial warned that "the situation in Iraq has now become so chaotic, that it transcends the death of one man, influential as al-Zarqawi was." "The price decline we are seeing today may therefore be limited in scope after the initial selling is over," Mr Meir added. The insurgents had frequently targeted Iraqi oil installations, and Iraqi oil output has still not recovered to anywhere near the level the government was hoping for. ---------------------------------------------------
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