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EDITIONS
 Monday, 23 December, 2002, 22:01 GMT
Oil prices close to two-year high
Soldier guarding a petrol station
Venezuelan fuel supplies are scarce despite army intervention
US oil prices are edging towards their highest level in two years amid continued supply disruption in Venezuela and fears of war in Iraq.

On the New York Mercantile Exchange, crude oil for February delivery jumped to $32 a barrel in after-hours trade, the highest since January 2001.

In London, Brent crude oil futures rose $1.38 to $29.72 a barrel.

World oil prices have risen by nearly a third in the past month on fears that a US-led military offensive against Iraq could disrupt supplies from the Middle East, the world's biggest oil exporting region.

The price rally also reflects a dip in supplies from Venezuela, where business groups have led a four-week long round of strikes against the country's left-wing government.

The oil strike has slowed output from the world's fifth largest oil exporter to a trickle.

Oil flowing?

The government has managed to maintain exports at between 5% and 10% of the usual 2.7 million barrels per day.

In Venezuela, tankers operated by the armed forces began delivering supplies to petrol stations around the country on Monday, after Mr Chavez promised Venezuelans a happy Christmas break.

But Venezuelan government assertions that it has restarted oil production and exports have been dismissed by striking oil executives.

The Supreme Court last Thursday ordered workers in the PDVSA state oil company to return to work.

Enforcement

Mr Chavez has already sacked four executives at the state oil company Petroleos de Venezuela (PDVSA) and said strikers would be arrested and prosecuted if they interfered with efforts to restart the industry.

"We have begun to recover PDVSA and we will start a cleansing in PDVSA," Mr Chavez said during his weekly television and radio show on Sunday.

"Those who didn't show up for work ... well, they will be fired."

Mr Chavez has also said judicial authorities also would begin criminal investigations into the damage caused to the economy by the strikers.

Oil provides about 70% of the country's export revenues, and shutdown is costing the government millions of dollars every day.

More than 2 million barrels of oil have been exported to the US, its biggest customer for, in the last nine days and another tanker carrying 500,000 barrels was due to leave port on Monday, Mr Chavez said in his weekly address.

  WATCH/LISTEN
  ON THIS STORY
  The BBC's Susie Salmond
"Oil prices could reach a catastrophic 40 dollars a barrel"
See also:

23 Dec 02 | Americas
19 Dec 02 | Business
21 Dec 02 | Americas
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