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EDITIONS
 Thursday, 2 January, 2003, 20:46 GMT
Oil price jumps after US reserves fall
US strategic oil reserve
US stockpiles are at level not seen since the 1970s
Oil prices have greeted the new year with a jump of almost 3%, as the markets reacted to data showing that the month-long strike in Venezuela has pushed US reserves close to 26-year lows.

By 1800 GMT, Brent crude was up 76 cents at $29.42 a barrel, up 2.8% from Tuesday's $28.66 close.

US light crude, meanwhile, gained 65 cents to $31.85 a barrel in out of hours trade on the New York Mercantile Exchange before falling back.

The American Petroleum Institute (API) said on Tuesday, after the markets closed, that US reserves had fallen by more than 3% in the week ending 27 December because shipments from Venezuela - formerly the supplier of 13% of the US's oil needs - had stopped.

The world's leading oil markets, London and New York, were closed on Wednesday for the New Year holiday.

Oil reached a two-year peak on Monday of $33.65 before falling sharply after the Organisation of Petroleum Exporting Countries (Opec) said it would meet any shortfall in supply.

Supply problems

Venezuela, the world's fifth largest oil exporter, has shipped less than 10% of its usual output since an opposition strike to overthrow its democratically elected president began on 2 December.

The US stockpile hit a 26-year low in October when storms disrupted oil operations in the Mexican Gulf.

The API report, which was released after the markets closed on Tuesday, is a key indicator for traders watching the world's biggest oil consumer.

Uncertainty about a US war with Iraq, and the possible disruption of Middle Eastern supplies, has also supported the high price of oil.

The international benchmark Brent crude oil in London fell $1.00 to close at $28.66 per barrel on Tuesday, having risen 44% in 2002.

See also:

31 Dec 02 | Business
30 Dec 02 | Americas
30 Dec 02 | Business
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