The price of oil ticked up in London in response to Iraqi determination to maintain an export freeze and OPEC intentions not to raise output to compensate.
A barrel of Brent North Sea crude for August delivery rose as high as $26.42 in London trading, before easing back to $26.33, from $26.08 at the close on Friday.
In New York, light sweet crude August futures welled up on Friday to $26.25, having earlier sunk close to $25.
The main reasons for the upswing are that Iraq has threatened not to resume exporting crude if the UN Security Council continues discussing revising the 11-year sanctions regime against Baghdad.
"We have got continued firmness mainly due to the Iraq-UN scenario," said ABN Amro dealer Mike Ingram.
Iraq suspended exports a month ago but the market had expected a denouement to the stand-off on Tuesday when the current sanctions expire.
The Organization of Petroleum Exporting Countries (OPEC) had promised to make good any shortfall arising from the missing Iraqi export volumes, which usually amount to more than two million barrels a day.
But ministers from OPEC member states arriving in Vienna for a meeting on output levels said they were happy with current production quotas and all but ruled out an increase in OPEC volumes.
"There is no reason for us to increase production, there is already lots of crude," said OPEC president Chakib Khelil of Algeria. — (AFP)
© Agence France Presse
© 2001 Mena Report (www.menareport.com)