Oil up as Iraq spurns UN deal

Oil up as Iraq spurns UN deal

SINGAPORE (Reuters): Oil prices rose in Asia on Monday in the expectation that Iraq crude exports will be absent for several more weeks following Baghdad's rejection of a short extension to its UN oil deal.

At 0730 GMT, January New York Mercantile Exchange (NYMEX) crude last traded at US$25.98 per barrel, up 17 cents from the New York close on Friday.

Iraq halted exports of some 2.4 million barrels per day (bpd) on November 22 in protest at an earlier UN proposal for a two- week extension of the deal.

Iraq's oil minister, Amer Mohammed Rasheed, said on Saturday that a further extension of one-week was meaningless.

A divided Security Council narrowly approved the one-week extension late on Friday. France refused to vote and Russia, China and Malaysia abstained.

"What is a one-week extension, it does not mean anything. Iraq refuses this procedure," Rasheed told reporters in Cairo.

Iraq has accused the United States of orchestrating the short extension to pressure other council members to agree on a broader resolution on Iraq.

The loss of Iraq's crude exports, estimated at just more than three percent of world supply, has come at a sensitive time for the oil market.

Prices are close to nine-year highs of $27.15 and stocks are falling rapidly at a time when global demand normally rises to meet heating requirement during the northern hemisphere winter.

The firm tone on Monday was further bolstered by comments from Saudi Oil Minister Ali al-Naimi that OPEC did not intend to change or adjust the output cuts, due to stay in place until March 2000.