Oil prices spurred to new highs by US war rhetoric 

www.channelnewsasia.com First created : 22 January 2003 0718 hrs (SST) 2318 hrs (GMT) Last modified : 22 January 2003 0718 hrs (SST) 2318 hrs (GMT)

World oil prices bubbled to new two-year highs on Tuesday amid escalating US war rhetoric over Iraq even though cracks started to appear in a Venezuelan strike that has cut deep into exports to the US.

US light crude in New York for February delivery, which expired at close of trade, settled up 70 cents at US$34.61 a barrel after hitting a peak of US$35.20, the highest level since November 2000.

March crude in New York, which took over as the front month contract, rose 23 cents to US$33.19 a barrel.

London Brent blend rose 9 cents to US$30.74 a barrel.

Fears of war in Iraq, the world's eighth largest oil exporter, rose as President George W Bush warned that Iraq had squandered "ample time" to avert war by disarming voluntarily, and the US ordered two more aircraft carriers to the Gulf.

Concern that war in the Middle East could disrupt the region's oil flows outweighed news from Venezuela that tanker pilots in Lake Maracaibo, a strategic export route, had ended their part in the nationwide strike.

With Venezuelan exports running at just 500,000 barrels a day, a fifth of normal levels, crude stockpiles in the US have slid close to 26-year lows just as a fierce cold snap in the US Northeast has boosted heating oil demand.

While an end to the tanker pilots' action in Venezuela could be expected to lift exports, shippers said deliveries were not likely to rise rapidly until foreign ship operators began using Venezuelan ports again.