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| Sunday, 09 March 2003 |
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Oil prices rise as US,Britain turn up heat on Iraq NEW YORK, Saturday (AFP) Oil prices rose Friday as the United States and Britain challenged the UN Security Council to deliver a March 17 ultimatum to Iraq: disarmament or war. "The market thinks we are going to war whatever the rest of the international community thinks," said Fimat brokerage's market analyst, Mike Fitzpatrick. Traders believed the United States would fight with only a small coalition behind it, he said. New York's reference light sweet crude April-dated futures contract shot up 78 cents to 37.78 dollars a barrel. In London, the price of benchmark Brent North Sea crude oil for April delivery climbed 58 cents to 33.11 dollars per barrel. The United States, Britain and Spain challenged the 12 other members of the sharply divided UN Security Council to decide within 10 days whether to disarm Iraq by force. British Foreign Secretary Jack Straw proposed the deadline in a council showdown between the five permanent members, as the pro-war United States and Britain lined up against pro-wait Russia, China and France. The British ambassador to the UN, Jeremy Greenstock, said failure to meet the proposed deadline would mean war. "Yes, it has to be military action," he told reporters when asked about the consequences. Traders said comments from chief UN weapons inspector Hans Blix, who said Iraq had speeded up cooperation with his disarmament teams, had done little to dispel fears that a war is a near foregone conclusion. "Blix tried to be equivalent, balanced, with a very diplomatic way of drafting things," said Commerzbank analyst David Thomas in London. But he added: "The market is still expecting a conflict in the near term, and it has not seen any reason to change its mind from Blix." Prices had risen after US President George W. Bush told a press conference Thursday the United States would push for a vote on the resolution no matter how much opposition there was on the UN Security Council. The market took little comfort from expectations that the Organisation of Petroleum Exporting Countries (OPEC) will pledge to make good any supply shortfall caused by a Gulf war. The cartel meets at its Vienna headquarters on Tuesday. A source close to OPEC said the producer group was working on a "contingency plan" to provide for shortages on the oil market if there was a war with Iraq. OPEC ministers would "see what measures are needed to offset a shortage if there is a military strike in Iraq" when they meet, the source said. OPEC agreed in January to raise its combined output ceiling by 6.5 percent to 24.5 million barrels per day to try to cool feverish world oil markets. But with oil prices rocketing as war looms large, experts are warning OPEC may be unable to prevent a prolonged rise in oil prices. Deutsche Bank analysts raised their prediction for crude oil prices for 2003 by four dollars per barrel to 25.5 dollars for Brent. "The impact of the strike in Venezuela, cold weather across the Northern Hemisphere, and worries over the possible loss of supply if a war on Iraq goes badly have dramatically boosted oil prices," they wrote in a note to clients. |
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