Oil prices rally on U.S. military moves
www.sfgate.com
Tuesday, March 4, 2003
(03-04) 16:08 PST (AP) --
Dow Jones News Service
NEW YORK (Dow Jones/AP) -- Crude oil futures rallied Tuesday, staging a sharp recovery after three straight sessions of declines on hopes that a war with Iraq could be averted.
Between Thursday and Monday, prices fell sharply as Iraq's increased cooperation with U.N. weapons inspectors and Turkey's rejection of access to U.S. troops sparked speculation that a U.S.-led attack on Iraq could be avoided, or at least delayed by several weeks.
But prices turned around Tuesday as the U.S. stepped up military preparations for a possible war and indicated it would seek U.N. Security Council approval of a resolution on military action next week, analysts said.
At the New York Mercantile Exchange, April crude oil futures rose $1.01 to end at $36.89 a barrel after rising as high as $37.18 intraday.
April heating oil futures ended up 1.26 cent at $1.0486 a gallon, while April gasoline futures climbed 1.74 cent to settle at $1.1122 a gallon.
At London's International Petroleum Exchange, April Brent futures rose 61 cents to close at $33.09 a barrel.
Natural gas for April delivery retreated 12.1 cents to settle at $7.041 per 1,000 cubic feet.
American officials, dismissing Iraq's destruction of its short-range Al Samoud 2 missiles as inadequate and insincere, pressed ahead for a final confrontation.
Military forces continued to mass in the Persian Gulf, with the United States deploying an additional 60,000 troops to the region atop the 230,000 troops already there. Turkey is also debating whether to resubmit a parliamentary motion to allow more than 60,000 U.S. troops to use the country as a northern front against Iraq.
At the same time, officials said they plan to bring to a vote next week a Security Council resolution authorizing military action against Iraq.
The measure, backed by Great Britain and Spain, faces stiff opposition from Security Council members, with Russia's foreign minister Igor Ivanov issuing a veiled threat to veto it.
But a White House spokesman said the United States believes it has the nine votes necessary to pass the resolution, though he left open the possibility that the United States might withdraw the resolution if it concludes it would not pass.
Regardless of the outcome of a vote, the United States says it's prepared to press ahead with an attack, barring an 11th-hour decision by Iraq to give up its weapons of mass destruction.
U.S. officials say there is virtually nothing Iraq could do to convince them that it is serious about disarming. In a speech Tuesday, President Bush reiterated his determination to see Iraq stripped of its weapons of mass destruction.
Energy traders worry that an attack on Iraq could disrupt the flow of oil from the Persian Gulf.
Meanwhile, OPEC and non-OPEC oil ministers will meet next week to discuss what they could do in the event of a war in Iraq, an official from the Organization of Petroleum Exporting Countries said.
OPEC countries have increased production in recent months in response to a strike in Venezuela and soaring oil prices. According to a Dow Jones Newswires survey, OPEC crude oil output jumped by 1.43 million barrels a day to 27.091 million barrels a day in February from January.