Oil prices jump ahead of UN inspector’s report

LONDON (AFP) – World oil prices rallied on Friday amid nervousness ahead of a key report to be delivered early next week by the chief UN weapons inspector Hans Blix on his team’s preliminary findings in Iraq.

The price of benchmark Brent North Sea crude oil for March delivery jumped 53 cents to $30.25 per barrel in late trading.

In New York, light sweet crude March-dated contracts rose 50 cents to $32.75 per barrel in early deals.

"The price is going up now because nobody wants to be short in front of Blix’s speech on Monday," said GNI-Man Financial oil trader Keith Pascall

Though inspectors say the speech is a progress report on work in Iraq, many diplomats fear it could be the start of the countdown to war.

"The 27th (of January) is a big day and there are rumors that some military attack could start as soon as the 28th," said Prudential Bache oil broker Tony Machacek.

A senior US military official said Friday that the United States was drawing up plans to move swiftly to protect Iraq’s oil fields in the event of a war in the belief that Iraqi leader Saddam Hussein is preparing to have them destroyed as he did in Kuwait.

"There are a number of indications through reliable intelligence sources that those activities have been planned and that in some cases they may have begun," said the official, briefing reporters on condition of anonymity.

The official said the military was drawing up plans to protect the oil fields while an inter-agency group that includes oil industry experts was examining ways to mitigate the damage.