LOS ANGELES, April 17 (UPI) -- Crude prices took a significant jump on the New York Mercantile Exchange on Thursday while OPEC appeared determined to cut back exports even with Iraq's entire oil industry offline until further notice.
May crude climbed $1.37 to settle at $30.55, its highest level in some two weeks, as NYMEX traders covered bets before starting a three-day weekend. The United States is struggling to build up summer gasoline inventories and OPEC is pressing for lower quotas.
"U.S. crude oil inventories remained relatively flat for the week ending April 11, rising by just 0.1 million barrels, and are 52.1 million barrels less than a year ago," the U.S. Energy Information Administration said.
"Gasoline inventories fell by 0.3 million barrels and are just below the low end of the normal range."
The inability to build up supplies before demand begins to climb during the summer driving season contributed to a 3.39-cent increase in May NYMEX gasoline futures.
While U.S. retail gasoline prices have tentatively softened following the outbreak of the Iraq war, the optimism that Iraq would be allowed to begin selling oil in the near future appeared to be fading Thursday.
Iran's oil minister, Bizhan Namdar-Zanganeh, told reporters in Tehran that an immediate reduction was needed to head off a long-term price slide that could result from adding Iraq's more than 2 million barrels per day to the market.
However, while the Iraqi oil sector survived the war relatively unscathed, the legalities involved in selling its oil cannot be addressed until there is a legal government in place in Iraq.
"How the Iraqis can decide, and how Iraqi control of their own resources can emerge is something that we'll just have to see," U.S. State Department spokesman Rick Boucher said Thursday. "I can't say that some other timetable, some artificial timetable, somebody else's meetings outside the country, is going to determine who represents Iraq when it comes to oil."
Iraq, with the world's second-largest crude reserves, might not even be represented in Vienna on April 24 when OPEC meets to discuss production cuts that appear inevitable.
There have been media reports that Saddam Hussein's oil minister had been invited to Vienna to represent Iraq as well as media speculation that the United States would send someone.
"There are meetings going on, there are Iraqis being identified who can take positions of responsibility in their government," Boucher said. "There are people still in some of the ministries who might be able to exercise a certain amount of responsibility. Whether the process will be at that point by next week when there is an OPEC meeting, for Iraq to be represented there, I don't know."
Iraq has no one in authority who can legally sell oil, and its oil exports are also technically under U.N. jurisdiction. The United Nations might not be able to end the sanctions until the entire country is checked for hidden weapons.
"Such a decision cannot be automatic; it requires the fulfillment of conditions set by U.N. Security Council resolutions on Iraq," Russian Foreign Minister Igor Ivanov said in a report from Moscow monitored by the British Broadcasting Corp. "To make such a decision, one must make sure if there are any weapons of mass destruction in Iraq."
Boucher told reporters in Washington that a new U.N. Security Council resolution could clear the way for lifting sanctions without first having to turn over every rock in Iraq.
"One has to accept the fact that with the fall of the Saddam Hussein regime, the need for economic sanctions goes away," he said hopefully. "It should be fairly obvious to everybody that we're not in the same situation that we were a month or two ago, or several years ago when other resolutions were passed."
