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.