Oil prices climbed for the fourth straight session on Monday, rising two percent as the US administration stepped up diplomatic efforts to win support at home and abroad for toppling Iraqi leader Saddam Hussein.
US light crude charged 59 cents higher to $30,20 a barrel bringing gains in the last four trading days to $2,41 a barrel, or 8,7%.
The possibility of war in Iraq has kept oil prices bubbling around the $30 mark, a level considered by consumers as detrimental to economic growth and likely to stymie demand for petroleum.
US crude topped $30 for the first time in two weeks on Friday as a new US-British attack on Iraqi air defence positions raised speculation that an all-out attack against Saddam was imminent.
A string of top advisers to US President George Bush cited new evidence on Sunday that Saddam was trying to make a nuclear bomb. Bush has called for the removal of Saddam, who he fears may use weapons of mass destruction or give them to militants elsewhere.
Traders are concerned that any escalation of violence in the Middle East could disrupt oil flows from the region, which sits on two-thirds of world crude reserves.
Bush plans to address the United Nations on Thursday and is expected to try to convince other governments to support US action against Saddam.
”There is a reluctance to be too long above $30 at this stage, although if the emotional build up around Iraq maintains the same pace the market could soon be seeing higher prices,” said Simon Games Thomas at NM Rothschild & Sons in Sydney in a morning note.
Analysts reckon the ”war premium” for uncertainty over Iraq has added between $4 and $6 on a barrel of crude, which will give some price hawks in the Opec producers’ cartel ammunition to argue against any output rise in the fourth quarter.
Ministers from the Organisation of the Petroleum Exporting Countries will meet on September 19 in Osaka, Japan, to review market conditions and production policy.
Opec output is running at a decade-low 21,7-million barrels per day and some analysts say more crude is needed on the world market to meet high demand during winter months to prevent a run up in oil prices that could damage the fragile recovery in the global economy.
Opec price hawks Kuwait, Iran and Venezuela have said they want current production limits maintained, but analysts believe kingpin Saudi Arabia wants to release more oil to prevent any spike in prices.
The Middle East dominated cartel controls two-thirds of world crude exports. – Reuters