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Crude oil rises as Bush seeks an OK for attack on Iraq

Crude oil rose as US lawmakers considered a resolution from President George W. Bush that would authorize military action against Iraq.

The resolution said Iraq possessed weapons of mass destruction, harbored terrorists and was a threat to the US Russian Foreign Minister Igor Ivanov and Defense Minister Sergei Ivanov told Bush in a meeting today that Russia wanted to see the return of UN weapons inspectors to Iraq and would strive to make their work more effective.

"Bush is trying to persuade Russia to join in the struggle against Iraq, but he's made clear that we'll go it alone if necessary," said John Kilduff, senior vice president of energy risk management at Fimat USA Inc. in New York. "Everyone has to protect themselves before the weekend. There are two full days of no trading and in this volatile situation that's a long time."

Crude oil for October delivery rose US$0.11 to US$29.61 a barrel on the New York Mercantile Exchange. Prices reached US$30 during the session for the first time since Sept. 10. Oil dropped 0.7 percent this week. The October contract expired today. The more active November futures contract rose 10 cents to US$29.84 a barrel.

In London, the November Brent crude-oil futures contract rose US$0.05 at US$28.43 a barrel on the International Petroleum Exchange.

The US has said Iraqi President Saddam Hussein must be ousted because he is stockpiling weapons of mass destruction. Iraq pumped about 2 percent of world supply last month.

Oil rallied during the session as Hurricane Isidore picked up strength and approached western Cuba with sustained winds of almost 165kph. Its movement toward the northwest may take it into the Gulf of Mexico by today, forecasters said.

High winds, heavy seas and rain can force the shutdown of offshore rigs, tanker terminals and refineries.

"Once the hurricane enters the Gulf, tankers from Mexico will have a hard time" making deliveries, said David Becker, manager of energy derivatives trading at Citibank NA in New York.
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