Oil prices fall on Iraq vote delay and Saudi pledge

Oil prices fall on Iraq vote delay and Saudi pledge

Barbara Lewis, Reuters, London

World oil prices fell on Tuesday as the United States and Britain
delayed a UN Security Council vote on a deadline for Iraq to
disarm or face war and Saudi Arabia pledged to ensure there would
be enough oil.

U.S. light crude slipped 33 cents to US$36.94 a barrel, below
its recent peak of $39.99. Oil prices set a record high of $41.15
a barrel during the 1990-91 Gulf crisis.

London benchmark Brent for April fell 37 cents to $33.32 a
barrel.

Traders were awaiting the outcome of a meeting of the
Organization of the Petroleum Exporting Countries (OPEC) in
Vienna scheduled to begin at midday.

The meeting was expected to stop short of endorsing a mooted
plan to allow members to pump oil at will and to instead maintain
existing output limits of 24.5 million barrels daily.

But the cartel was also expected to signal its intention to
ensure supply in the event of a disruption.

As the market awaited, traders said that on Tuesday prices
might weaken, but not for long.

"Prices might come off a little bit, but it will be short-
lived," said Rob Laughlin of GNI-Man Financial.

Laughlin said OPEC was anxious to avoid oversupplying the
market amid widespread predictions that a possible war in Iraq
would cause a brief spike in prices, followed by a collapse
provided any war was short.

"They (OPEC) don't want to go from a boom to bust scenario.
They don't want to go from high prices to a sudden collapse. They
want to have an orderly market," he said.