19 MARCH 2003

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Oil prices plunge to massive lows, Commons debate pulls through

Oil prices have dived to their lowest level in two months after President Bush gave Saddam Hussein and his coterie of generals just 48 hours to leave Iraq. Hussein’s crisp answer has been in the negative, with attack on Iraq now imminent.
Industry benchmark Brent crude shed US$2.78 to US$26.70 a barrel, its lowest point since January, as stock markets continued their volatile trend of recent weeks.
The looming air bombardment and ground invasion of Iraq has threatened to interrupt oil supplies and send prices soaring.
Many fear an invasion would spark turmoil in the Middle East, which supplies two-fifths of globally traded crude.
Higher crude oil prices have a knock-on effect on the wider economy, pushing up prices for petrol, heating oil and other fuels which in turn raise the cost of energy and transport.
But traders are now betting on a short and decisive war that will not hit oil supplies outside Iraq. Nervous dealers continued to keep a close eye on diplomatic developments in search of clues as to when military action could begin.
The short-term security of supply has been a key theme in the build up to war. Some analysts now seem confident the war will be contained within Iraq, the world's seventh-largest oil supplier.
For the Bush administration however, it seems the road to Baghdad is linked to economic recovery, with observers predicting that launching a war on Iraq will actually fire up the stock market, triggering a revival of the US economy.
It is also expected that military victory will unleash latent economic forces, which should also guarantee Bush a revival of vigour come re-election 2004.
On the other side of the Atlantic, a resolved Blair remains oblivious to the murmurs in the backbenches at the House of Commons, awaiting the penultimate vote on his case against Iraq.
His other opponents, apart from an overwhelming public disapproval at Blair’s gung-ho plunge into America’s war, include the Liberal Democrats, Britain’s third party in the House of Commons.
Iain Duncan Smith’s Tories are well behind Mr Blair: "Let me just say, Madam Speaker, why we back Mr Blair’s case against Iraq. Not because we endorse every detail, not certainly because we are eager for conflict… but as the House knows, I have served in the armed forces myself and I know of the horror of the aftermath of conflict.
"Saddam Hussein is a tyrant and a murderer, and poses a threat to the safety and stability of the Middle East."
Liberal Democrat leader Charles Kennedy told MPs: "We do not believe that there is a case for war that has been established in the absence of a second resolution.
"There stands no contradiction between giving voice to legitimate anxiety and at the same time, as and when exchange of fire commences, looking to the rest of the country to give full moral support to our forces.
Mr Kennedy said the Tory Government had provided the Iraqi dictator with anthrax and other chemical weapons and had approved the construction of dual-use factories in Iraq.
Mr Kennedy told MPs: "I have never once been persuaded as to any link between the Iraqi regime, al Qaida and 11 September. I do believe the impact of war under these circumstances is bound to weaken the international coalition against terrorism itself - not least in the Muslim world."

Copyright © Newsworks Ltd. Malta.
Editor: Saviour Balzan
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