LONDON, March 26 - Oil prices rose three percent on Wednesday, recouping losses triggered the day before by what Britain called a "limited" civilian uprising against Iraqi government forces in the southern Iraqi oil city of Basra. Week-long production closures in Nigeria also kept the heat under crude prices. U.S. light crude futures rose 77 cents to $28.74 a barrel, after a 25 percent fall last week when dealers took the view that the war would not last long. London Brent gained 78 cents to $25.59 a barrel. "Prices fell before the war because extra OPEC oil is going to rebuild low stocks but the fall was overdone and now we're seeing a reaction to that," said Leo Drollas of London's Centre for Global Energy Studies.
"There's general concern about the impact of the Nigerian oil situation and growing expectations that the war could drag on longer than earlier anticipated," said a London-based broker. On day seven of the war, U.S. warplanes launched a fresh wave of strikes targeting positions of Iraqi President Saddam Hussein's Republican Guards south of Baghdad. Indications that a popular revolt might be under way in Basra, Iraq's second biggest city, had sent prices diving on Tuesday as hopes rose among traders for a rebellion that might speed the end of Saddam's government. But British Prime Minister Tony Blair said on Wednesday that a major rebellion could be "some way off." "In relation to what has happened in Basra overnight, truthfully reports are confused, but we believe there was some limited form of uprising," he told parliament. The mainly Shi'ite Muslim population of Basra rose up against Saddam's Sunni-dominated government after the 1991 Gulf War, but their revolt was rapidly smashed as U.S. forces stood aside. U.S.-led forces had been hoping the Shi'ite south would welcome their invasion this time round.
The Basra correspondent of the Arabic television network al Jazeera, reporting from the city on Wednesday, said there was no sign of an anti-Saddam uprising. "The streets of Basra are very calm and there are no indications of violence or riots," reporter Mohammed al-Abdallah told the Qatar-based network.
NIGERIAN DISRUPTIONS
In Nigeria, clashes between the Ijaw ethnic group and the military, ahead of April 19 elections, kept closed about 800,000 barrels per day of the West African OPEC country's 2.2 million bpd of crude production. Nigerian shortages came as the United Nations said Iraqi oil exports fell sharply in the week that war started, dropping to 443,000 bpd in seven days to March 21 from 1.8 million bpd the week before. The reduction followed the withdrawal by the United Nations of monitors for the U.N. oil-for-food programme at the country's southern Gulf oil port Mina al-Bakr ahead of the U.S.-led attack. Iraq can still export from its northern oilfields through a pipeline to the Turkish Mediterranean but banks have refused to issue traders letters of credit. U.N. officials said tankers were still permitted to ship oil from the Turkish port of Ceyhan that is still receiving crude from Iraq, but traders said widespread confusion about the programme's status and security had stopped shipping.
In weekly U.S. government data, due later on Wednesday, analysts polled by said they expected gasoline stocks in the United States to show a decline of 800,000 barrels to around 200 million barrels. The poll forecasts a 700,000-barrel rise in distillates, which include heating oil and diesel, to about 98 million barrels and a 2.6-million-barrel rise in crude stocks.//