The price of oil rose on Tuesday after US President George W. Bush hinted that Iraq might be a future target of the US-led war on terrorism, stirring concerns that Gulf crude producers might become embroiled in a wider conflict.
A barrel of Benchmark Brent North Sea crude for January delivery was selling for $18.55, up 19 cents from Monday evening. In New York, light sweet crude January-dated futures closed overnight down $.27 at $18.69.
Prices have declined steadily in recent days as world crude producers have floundered in their efforts to agree on a pact to rein in supply and remove a glut from the market. The Organization of Petroleum Exporting Countries (OPEC) wants leading producers to make significant output cuts, but has held back from reducing its own outflow again until key producers such as Russia agree to follow suit. But the prospect of a US military campaign against Iraq is enough to send a ripple through the market and support prices.
Previous crises that pitted Western oil importers against Arab Gulf crude producers have resulted in sharp spikes in the oil price, as witnessed in 1973-4, 1990 and again last autumn. Thus Bush's warning on Monday to Iraqi President Saddam Hussein he must allow UN arms inspectors back in Iraq to prove to the world he is not developing weapons of mass destruction lent support to prices.
Asked what consequences a refusal would bring, the US leader curtly replied: "He'll find out" -- a cryptic reply that fuelled speculation that the regime in Baghdad might be next on Washington's list of targets after the Afghan Taliban militia. — (AFP, London)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)
