Oil edges higher after sharp Iraq-led fall
Oil edges higher after sharp Iraq-led fall
Richard Ayton, Reuters, London
Oil prices firmed on Thursday, shell-shocked after a drop to
eight month lows on Iraq's acceptance of new United Nations
weapons inspections.
International benchmark Brent crude oil was 21 cents higher at
US$22.91 a barrel, having slumped by over a dollar on Wednesday
after Iraq's letter of acceptance was delivered to the U.N.,
easing fears of an imminent assault by the United States against
the oil producer.
U.S. crude futures traded on an after-hours electronic system
were 22 cents up at $25.41.
U.S. President George Bush warned Iraqi President Saddam
Hussein he would be judged by his actions, not his words.
"If he chooses not to disarm, we will disarm him. That should
be clear to Saddam Hussein and everybody else."
Any U.S. intervention in Iraq could near double the price of
crude oil, Venezuelan President Hugo Chavez said on Wednesday.
Speaking in Colombia, the leader of the world's fifth largest
oil-producer said: "An Iraq war could push the oil price over
$40, according to certain scenarios we have been evaluating in
OPEC."
Traders' fears a war would cause disruption throughout the
oil-rich Middle-East helped oil hit $30 a barrel in September,
but the price has since deflated as increased production from
OPEC members has reached the market.
OPEC in October pumped 3.21 million barrels per day above its
self-imposed 21.7 million bpd production ceiling, according to a
Reuters survey.
The cartel will meet on Dec.12 in Vienna to review production.
Venezuelan oil minister Rafael Ramirez has said the group
would act to support prices if crude continues to fall.
Dealers are also awaiting Thursday's U.S. Department of Energy
data on crude oil stocks in the United States.
Traders will compare the figures with Tuesday's American
Petroleum Institute (API) data, which showed a surprise decline
in U.S. oil stores.
Differences between the two bodies in accounting for oil in
transit mean the official figures are expected to show stocks
down by between three and four million barrels.
The API figures showed a 7.2 million-barrel fall in U.S. crude
stocks in October, partly down to an earthquake in Alaska which
disrupted the oil pipeline there.