January 29, 2003	Wednesday	Ziqa’ad 25,1423

LONDON, Jan 28: Oil prices climbed on Tuesday on rising worries about the threat to Middle East supplies of a war in Iraq after Baghdad said it had not ruled out an attack against its oil-rich neighbour Kuwait.

Traders were also nervous ahead of a major speech by US President George W. Bush in which he was expected to brace Americans for possible war with Iraq, despite signs of opposition from fellow members of the UN Security Council.

The price of benchmark Brent North Sea crude oil for March firmed 25 cents to $30.11 per barrel in late deals.

In New York, light sweet crude March-dated futures rose 19 cents per barrel to $32.48.

“Prices have rallied... following comments by Iraqi officials that they might attack Kuwait,” said Lawrence Eagles, analyst at brokers GNI-Man Financial.

Iraqi Deputy Prime Minister Tareq Aziz said Kuwait “is a battlefield and American troops are in Kuwait and preparing themselves to attack Iraq.”

But Barclays Capital analyst Kevin Norrish said that although Aziz’s remarks had helped spark a recovery, many traders remained reluctant to take fresh positions ahead of Bush’s State of the Union address to Congress.

“Nobody wants to do very much before the speech which will clarify the US position,” Norrish said.

Prices slumped on Monday after a report by UN chief weapons inspector Hans Blix on Iraq fed hopes that war might be further away than had been feared.

Eagles said although Blix had given a “slightly more negative-than-expected assessment of Iraq’s cooperation”, the market had responded to indications that the weapons inspectors would be given “a few more weeks at least to carry out their tasks.”

Analysts say the threat of disruption to Iraqi oil comes as the market is already tight because of a strike in Venezuela.—AFP