Oil gains as Rumsfeld talks up war

www.online.ie Business & Finance 21 Feb 2003

Brent crude oil continued to gain in afternoon trade after US Defence Secretary Donald Rumsfeld said US forces are ready to attack Iraq. At 1430, Brent was trading up 48c at USD32.04.

Brent crude has gained around USD9.00 in the three months since mid-November as investors priced in the risk that any war with Iraq could jeopardise supplies from the country and possibly the wider region.

Analysts said that the sharply higher move this morning followed a slump in late trade yesterday, prompted by a collapse in oil products after recent 23 year highs on NYMEX heating oil.

Observers also noted that yesterday's slump was also prompted by weekly inventory data from the US Department of Energy which revealed a surprise rise in crude levels, lifting stocks from recent 28 year lows.

One dealer said that the market would not have recovered sufficiently from the Venezuelan stoppage before Iraq became a serious issue.

However, the fact that Venezuela is partially back up is much better than the fears a few weeks ago that both Venezuela and Iraq would be off line together, he added.