Oil down despite Iraq's rejection of UN deal

Oil down despite Iraq's rejection of UN deal

SINGAPORE (Reuters): Crude oil prices were lower in Asia on
Monday, despite Iraq's rejection of a sanctions-easing resolution
adopted by the UN Security Council.

January New York Mercantile Exchange (NYMEX) crude futures
were last traded at US$26.55 per barrel at 0750 GMT, down 19
cents from its New York settlement.

Traders said prices weakened as some traders unwound positions
before the January crude contract expires later in New York
trading.

U.S. crude prices are more than double the levels of a year
ago, but are below a nine-year peak of $27.15 hit late in
November.

The UN Security Council passed a resolution on Friday that
could result in UN weapons inspectors returning to Iraq and
easing sanctions if Baghdad cooperates with a new UN disarmament
agency.

The new resolution eliminated the cap on how much oil Iraq is
allowed to sell under the UN "oil-for-food" deal, currently set
at $5.26 billion every six months.

But Iraq rejected the resolution, saying sanctions should be
lifted without restrictions or conditions.

Iraq's Deputy Prime Minister Tareq Aziz on Saturday dismissed
the resolution as trickery and said Iraq had met all its
commitments towards the UN resolutions which were passed after
the 1991 Gulf War.

"The resolution that was adopted yesterday does not meet
Iraq's legitimate right in removing the (UN) embargo," Aziz said
in a statement carried by the official Iraqi News Agency INA.