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.