Oil prices hold above US$33 a barrel in early trading

Oil prices hold above US$33 a barrel in early trading

LONDON (AFP): Oil prices showed little sign of movement in
early trading on Monday, supported above US$33 a barrel by the
prospect of an Iraqi threat to withhold oil from the thirsty
market.

Benchmark Brent crude for delivery in January edged down to
$33.02 a barrel from $33.12 at the close on Friday.

The market was awaiting the outcome of a dispute between Iraq
and the United Nations over Iraqi oil revenues.

Baghdad has threatened to halt its pumps if the United Nations
blocks its demand for an extra payment of 50 cents a barrel into
an account outside of UN control.

It has also thrown another spanner in the works by requesting
that the UN sanctions committee extend the current phase of the
oil-for-food program until January 15.

And on Saturday, Iraqi President Saddam Hussein said he would
ask the United Nations to set aside part of Iraq's oil revenues
for the Palestinians.

Dresdner Kleinwort Benson analyst Medhi Varzi said that
traders were plagued by "some uncertainties in the market about
what their (Iraq's) intentions are."

Nervousness increased on Monday after the Middle East Economic
Survey (MEES) warned that it expected Baghdad to suspend exports
in the coming days over the spat.

"MEES soundings indicate that until this problem is resolved,
a disruption of Iraqi oil exports can be expected," it said.

An oil embargo by Iraq, which pumps 2.3 million barrels of oil
a day, could quickly drain fragile stocks, analysts warn,
although Saudi Arabia has pledged to plug any gaps in the
pipeline caused by political factors or natural disasters.

The market was also set to be deprived of up to two million
barrels of crude a day from Nigeria where oil workers began
striking on Monday over pay.

Against this backdrop, forecasts of a rise in temperatures in
parts of the United States have had little effect on prices.

The GNI institute predicted on Monday that forecasts of a
return to milder temperatures in the US Northeast over the coming
days could ease prices slightly, but added that the market would
wait for this week's figures on US stocks before making any
moves.