Market watch: Oil prices climb on Venezuela strike, Iraqi concerns

Oil prices climbed Monday on concerns about oil workers joining a strike in Venezuela and also as nervousness built while United Nations weapons inspectors looked for weapons of mass destruction in Iraq.

By OGJ editors

HOUSTON, Dec. 3 -- Oil prices climbed Monday on concerns about oil workers joining a nationwide general strike in Venezuela and also as nervousness built while United Nations weapons inspectors looked for weapons of mass destruction in Iraq.

Iraq has a Friday deadline to disclose a list of all its long-range missiles; chemical, biological, and nuclear weapons; and other weapons programs to UN inspectors.

Although Iraq denies that it has any such weapons, US President George W. Bush issued a strongly worded statement warning Baghdad to cooperate or else run the risk of military action.

The January contract for benchmark US light, sweet crudes gained 35¢ to $27.24/bbl Monday on the New York Mercantile Exchange, while the February contract was up 33¢ to $27.04/bbl.

The price of unleaded gasoline for December delivery jumped by 2.10¢ to 74.39¢/gal. Traders said gasoline benefited the most of all energy futures from the Venezuela strike because that country is a key petroleum exporter to the US.

Petroleos de Venezuela SA Pres. Alí Rodríguez Araque told reporters at a news conference in Caracas that about 50% of oil industry workers failed to come to work Monday morning but that the figure declined to 40% during the afternoon.

"Given the very particular situation that the country is going through, we can say that activities in the oil industry have been basically normal," Rodríguez said.

"The country is not going to run out of fuel. There are sufficient inventories to cover the requirements on the domestic market," he said.

Rodríguez declined to comment on the possibility that opposition groups might eventually call an indefinite strike, saying, "We will cross that bridge when we come to it."

Rodríguez promised PDVSA would "responsibly take all the measures necessary to guarantee the continuity of operations and to guarantee supply" both for the domestic market and to for its international customers' needs.

Heating oil for the same month rose by 1.41¢ to 77.39¢/gal. The January natural gas contract gained 12¢ to $4.32/Mcf Monday on NYMEX.

In London, the January contract for North Sea Brent oil gained 46¢ to close at $25.62/bbl on the International Petroleum Exchange. Monday's Brent prices traded in a range of $25.17-25.75/bbl.

The January natural gas contract lost 0.20¢ to the equivalent of $3.82/Mcf on IPE.

The average price for OPEC's basket of seven benchmark crudes gained 25¢ to $25.66/bbl Monday.

More in General Interest