Possible U.N. Deadline on Iraqi Withdrawal Pushes Up Oil Prices

Oil prices jumped more than $2 today, topping $34 a barrel in early trading on the prospect of a U.N. deadline Jan. 1 for Iraq to withdraw from Kuwait, as suggested by the United States.

The U.N. Security Council will meet Thursday to discuss the U.S. proposal, made public on Sunday, which could sanction the use of force should Iraq not comply with the resolution.

The prospect of the gulf being closer to war helped the New York Mercantile Exchange and the London International Petroleum Exchange get off to fast starts.

In New York, January crude oil was up $2.05 at $33.95 a barrel in late morning trading after earlier hitting a high of $34.25.

“The possibility of a U.N. resolution and an ultimatum being passed has gotten war drums beating again,” said Tom Bentz, analyst with United Energy Inc.

December gasoline soared 5.35 cents to 87.75 cents a gallon. Heating oil for delivery next month jumped 5.79 cents to 94.45 cents a gallon.

The January futures price of North Sea Brent blend, an international benchmark crude, advanced to $33.20 a barrel in midday trading in London from Friday’s close of $31.