Oil surges as war fears grow
Monday, December 30, 2002 Posted: 1014 GMT
LONDON, England -- Crude oil prices hit new two-year highs on Monday as concern grew over a possible U.S.-led attack on Iraq and a strike in Venezuela, the world's fifth-largest oil exporter, dragged on.
Brent crude oil for February delivery, the London benchmark, was up 44 cents to $30.60 in early trading.
The main U.S. oil futures contract was trading at $33.17 in after-hours electronic trading on the New York Mercantile Exchange. That is the highest level for crude since December 1, 2000.
"Iraq, North Korea, surging oil prices... [means] global equities will likely remain under pressure until war begins next year,'' Koichi Ogawa, chief portfolio manager at Daiwa SB Investments, told Reuters.
Oil prices soared after the arrival at the weekend of U.S. troops, aircraft and ships in the Gulf as preparations continue for a possible war against Baghdad.
The escalation of tension comes as U.N. weapons inspectors continue to search for evidence that Iraq has biological, chemical or nuclear weapons. (Full story)
At the same time, North Korea is being criticised for reactivating a nuclear power plant -- which is capable of producing enough weapons-grade plutonium to make two or three nuclear bombs per year -- and telling U.N. inspectors to leave the country. (Full story)
Fatal attacks in Chechnya and the West Bank on Friday added to global tension and concerns that any military action could disrupt oil shipments.
A month-old strike in Venezuela -- the world's fifth-largest oil exporter and a major supplier to the U.S. -- has also put upward pressure on oil prices.
Opponents of embattled President Hugo Chavez planned more protests against his government as Venezuela began importing petrol to break an oil workers' strike.
The first shipment arrived on Saturday from neighbouring Brazil. The move has enraged Chavez's opponents, who accused Brazil of interfering in Venezuela's internal affairs by helping the leftist leader to break the strike.
The strike has led to mile-long queues for fuel in Caracas and other cities. (Full story)