Oil prices at 2-year peaks as Britain beefs up Gulf forces
OIL prices continued to track higher yesterday to levels not seen in more than two years as Britain announced it would strengthen its military forces in the Gulf in preparation for possible war in oil-exporting Iraq.
US light crude CLc1 climbed 15 US cents from last Friday's close to US$34.06 a barrel, the highest since December 2000.
The New York Mercantile Exchange was closed on Monday for Martin Luther King Jr Day.
Crude prices continue to gain strength from the ongoing strike in Venezuela and the looming threat of military action in the Middle East, which pumps about a quarter of the world's oil needs.
'The markets are still very edgy with both Venezuela and Iraq remaining the key issues against a backdrop of increasing demand and falling inventory,' said Sydney-based independent oil analyst Simon Games-Thomas.
'Prices appear destined to trade higher, given the current set of drivers and US$35 beckons inexorably in the short term,' he said.
Foes of Venezuelan President Hugo Chavez yesterday extended a nationwide strike into the 51st day, aiming to force the leftist leader to resign and call immediate election.
The strike has strangled oil supplies from the world's fifth-largest exporter, which accounts for about 13 per cent of petroleum imports into the United States.
As Britain prepared to send 30,000 troops and support staff to the Gulf region, chief United Nations (UN) weapons inspector Hans Blix said it was up to Iraq to convince the world it did not have any chemical, biological or nuclear weapons.
'The Iraqis have to create confidence in the world that they don't have weapons of mass destruction,' he said in Athens after a two-day visit in Baghdad.
'We don't say that they're guilty. We are not sure about it.
'There has not been enough evidence for us to report to the council that you can close the dossier. There remains questions to be answered.'
He will deliver a major report by weapons inspectors to the UN on Monday.
US Secretary of State Colin Powell, facing strong opposition in the Security Council against any war in Iraq, warned council members not to shirk responsibility when they meet next week to discuss the report.
'We cannot be shocked into impotence because we are afraid of the difficult choices that are ahead of us,' he said. --Reuters