Oil prices rise as Powell presents

www.news.com.au February 06, 2003

WORLD oil prices rose as US Secretary of State Colin Powell presented declassified evidence to try to persuade the United Nations Security Council that Iraq was defying weapons inspectors.

Prices shot up ahead of Powell's speech as traders sweated over the possible content, but then settled back a little, still closing above the previous day's level.

"What you have for the oil market right now is uncertainty," Bear Stearns market analyst Fred Leuffer said.

"There is a confluence of low inventories in the United States, Venezuelan production running at less than 40 per cent of normal, and of course prospects for war."

Leuffer estimated oil prices carried a premium of six to eight US dollars because of the war risk.