Crude oil prices up as US announces March 17 deadline

www.taipeitimes.com REUTERS Sunday, Mar 09, 2003,Page 10

World oil prices hurtled higher again on Friday as the US and Britain set a March 17 ultimatum for Iraq to disarm or face war.

A revised draft resolution circulated by British Foreign Secretary Jack Straw at the UN, backed by Washington, gives Baghdad 10 days to meet UN demands.

The two allies during that time hope to garner support in the bitterly divided 15-member UN Security Council for military action against Iraq, which ships around 4 percent of world oil exports.

US light crude climbed US$0.78 to US$37.78 a barrel, barely US$2 short of a recent 12-year high. Brent crude futures rose US$0.57 to US$34.10 a barrel, a two-year high.

"News of that deadline is certainly keeping the market very strong," said broker Christopher Bellew of Prudential Bache in London.

"Any final deadline will give the market another shove to the upside," said Tom James of broker Carr Futures.

Oil prices have already jumped 20 percent this year on fear that war in Iraq will hit exports from the Middle East, which pumps a third of the world's oil. Concern is growing that rising energy costs will further strain a weak economy.

An oil workers' strike in nearby Venezuela, and strong heating demand in a bitter northern winter has already drained US fuel stocks. The government warned on Thursday that gasoline prices would hit record levels this summer.

Saudi Arabia, the biggest producer in the OPEC cartel, has said it will raise production to meet any shortfall international market