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EDITIONS
 Tuesday, 24 December, 2002, 12:00 GMT
War threat sends oil price higher
US strategic oil reserve
The US has been stockpiling oil to prevent shortages
Oil prices have continued to climb as US threats to start a war in Iraq and a national strike in Venezuela have unsettled the markets.

In thin trade before the Christmas break, benchmark Brent crude oil closed at $29.60 at 1230 GMT after trading as high as $29.80, just shy of the $29.88 post-September 11 peak.

President Hugo Chavez
Chavez has restarted some Venezuelan exports
"Traders are already fretting about the possibility of a strike on Iraq and a Venezuelan dispute overlapping," , said Lawrence Eagles at GNI.

US crude oil prices rose to $32 a barrel for the first time in almost two years on Monday.

London's International Petroleum Exchange, the world's leading oil market, reopens for business on Friday for a shortened session.

Troubled world

Fears of war were heightened when an Iraqi plane shot down and unmanned US Predator spy plane in Iraq's southern no-fly zone.

On Monday, US Defence Secretary Donald Rumsfeld stoked up global tension by threatening North Korea with military action, suggesting a two-front war.

Oil prices were also driven by events in Venezuela where a strike by right-wing business groups and unions against leftist President Hugo Chavez' rule has entered its fourth week.

Mr Chavez said his administration had restarted oil output and exports but the state-owned oil company Petroleos de Venezuela (PDVSA) said production had fallen to less than 7% of November levels.

Talks between the two sides have been suspended until Thursday.

Venezuela, the world's fifth largest oil exporter, normally supplies more than 13% of US oil imports.

See also:

24 Dec 02 | Business
23 Dec 02 | Middle East
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