Oil prices dipped as the U.S. said Powell will reveal more details about Iraq on February 5.

europe.cnn.com Thursday, January 30, 2003 Posted: 1120 GMT

LONDON, England -- Oil prices dipped slightly on Thursday as the U.S. upped the diplomatic pressure on Iraqi leader Saddam Hussein to reveal any weapons of mass destruction.

However, a large drop in U.S. winter heating fuel stocks deepened oil supply worries.

Brent crude futures for March delivery were down 11 cents to $30.91 in London morning trading on Thursday.

The possibility of war in the Gulf region -- which supplies 40 percent of world crude oil exports -- and a strike that has cut exports from Venezuela have pushed up prices 35 percent since late November.

U.S. President George W. Bush continued to lobby for support in a war against Iraq. On February 5, Secretary of State Colin Powell will seek to build support for war. (Full story)

German Chancellor Gerhard Schroeder, one of the European leaders most strongly opposed to war on Iraq, said on Wednesday he was unsure whether diplomacy would succeed in averting war.

Meanwhile, Britain led a group of eight European countries calling for unity in forcing Saddam to disarm. (Full story)

The combined European stance prompted analysts to say the market expected further oil price gains.

"The comments from European countries saying that Saddam has a short period of time in which to act leads me to believe that they will shift towards supporting the use of force in the next week or so," Sydney-based independent energy analyst Simon Games-Thomas told Reuters.

Wednesday's price gains came as the U.S. government reported that a two-week freeze across the eastern part of the country cut more than three million barrels, or eight percent, from heating oil stocks last week.

"Though it would be easy to focus on the near-$1 rally in crude prices, the real story for the day was the disproportionate strength in heating oil and gasoline prices," Michael Rothman, energy analyst at Merrill Lynch, told Reuters.

Supplies are now 16 percent below normal levels. Home heating oil prices are at 23-month highs, up 25 percent from last year, boosting concern over the economic impact of higher energy costs.

The U.S. has taken about two-thirds of all Iraq's U.N.-controlled oil exports in January as key supplier Venezuela struggles through a strike aimed at removing President Hugo Chavez from office. (Full story)

Venezuela, which normally supplies more than 13 percent of U.S. oil imports, said on Wednesday it had managed to raise strike-hit oil production to 1.4 million barrels a day, while striking oil workers put the output level at just above one million barrels.