Oil rises on U.S.-Iraq tension

LONDON, England -- Global oil prices rose on Monday after the U.S. administration stepped up efforts to win support for possible military action against Iraq, which could disrupt the supply of crude from the Middle East.

Brent crude for October delivery stood at $28.47 a barrel in early London trading, up 18 cents from its close on Friday. In New York, U.S. light crude prices rose above $30 a barrel -- its highest level in two weeks -- before easing back to $29.90.

Concerns over disruption of shipments from the Middle East, which has two-thirds of the world's crude reserves, mounted as the U.S. administration intensified its efforts to gain international backing to topple Iraqi leader Saddam Hussein.

The possibility of an all-out attack on Iraq pushed U.S. oil prices on Friday above $30 -- a level that is considered harmful to economic growth and could weaken consumer demand for petrol.

"There is a reluctance to be too long above $30 at this stage, although if the emotional build up around Iraq maintains the same pace the market could soon be seeing higher prices,'' Simon Games Thomas of NM Rothschild & Sons said in a note to investors.

U.S. President George W. Bush and members of his administration claimed on Sunday they had new evidence that Iraq was attempting to make a nuclear bomb. Bush has called for the removal of Saddam, who he says may deploy weapons of mass destruction or provide them to terrorist groups elsewhere in the world.

The president is set to address the United Nations on Thursday to outline his position on Iraq and seek support from other countries for military action.

The Organisation of the Petroleum Exporting Countries will meet on September 19 to review its production levels. The cartel's crude output is now at a 10-year low of 21.7 million barrels per day.