CORRECTED - UPDATE 1-Oil edges higher ahead of Blix report
www.forbes.com Reuters, 01.27.03, 5:45 AM ET
In the LONDON story headlined "Oil edges higher ahead of Blix report" in the third paragraph please read ...1530 GMT (1030 local time)... and not ...1030 GMT (1030 local time)... (corrects time). A corrected repetition follows.
LONDON, Jan 27 (Reuters) - Strong oil prices held ground on Monday, awaiting a report from U.N. weapons inspectors for clues to the likelihood of war in Iraq.
U.S. light crude
Chief U.N. weapons inspector Hans Blix at 1530 GMT (1030 local time) on Monday will deliver his first full report to the U.N. Security Council on Iraq's 12,000-page weapons declaration and Baghdad's cooperation with arms inspectors.
Blix said he would report that Baghdad has not submitted a full account and is also expected to say that it has hampered interviews with Iraqi scientists and blocked the use of U-2 surveillance flights over all parts of Iraq.
Blix told reporters that when questions arise about anthrax, the deadly VX nerve gas or Scud missiles, the Iraqis "simply say there is nothing left of this, and there is no evidence that we can view, there are no more documents."
U.S. President George W. Bush will make a State of Union address on Tuesday and is due to meet key ally Britain's Prime Minister Tony Blair later this week. Britain has sent thousands of troops to join a U.S. military build-up in the Gulf.
"Each of these stages will provide further clarity and we can expect a timetable to war to become a little clearer," said Sydney-based independent oil analyst Simon Games-Thomas.
Washington has made it clear it is ready to attack Iraq alone if needed.
U.S. secretary of State Colin Powell said at the weekend that time was running out for Baghdad to disarm voluntarily.
"We will not shrink from war if that is the only way to rid Iraq of its weapons of mass destruction," Powell said at the World Economic Forum (WEF) in Davos, Switzerland.
SAUDI SAYS NO SHORTAGE The world's biggest oil exporter Saudi Arabia, said at the weekend that it and fellow OPEC members were pumping sufficient volumes to prevent shortages on world markets.
Oil prices are near two-year highs on concerns that an attack on Iraq might coincide with the ongoing strike in Venezuela, which has strangled exports from the world's fifth-biggest exporter.
"There is no shortage in the market and there should be no reason for prices where they are today," Saudi Oil Minister Ali al-Naimi told a panel in Davos.
"We checked. We called. I checked with individual customers, refineries and others. I ask them one question: Do you feel you need more oil? And the answer is no," he said.
The Organisation of the Petroleum Exporting Countries agreed two weeks ago to raise output by 1.5 million barrels per day to counter some of the shortfall caused by a nationwide strike in Venezuela. Venezuela's President Hugo Chavez hinted at the weekend that he may be forced to take up arms if he were defeated by the opposition movement, which is calling for Chavez to step down.
Venezuelan crude output has recovered from lows in December when it was running at a trickle of about 150,000 bpd against more than three million bpd before the strike, which started on December 2.
Strikers said on Sunday that production was about 986,000 bpd, 30 percent of pre-strike levels, while Chavez claimed production had reached 1.32 million bpd.