The price of a barrel of oil has jumped by more than 4% over fears a strike in Venezuela, the world's fifth largest oil exporter, will cut global supplies. Protests by Venezuelan opposition groups aimed at ousting President Hugo Chavez have entered a third week. Supply fears have been compounded by US and British threats to attack Iraq, which could disrupt production Middle East.

Brent crude, the benchmark oil price, gained 1.09 to 28.30 a barrel in late trade in London, its highest level since 16 October.

US oil futures jumped DLRS 1.68 to DLRS 30.12 a barrel.

OPEC CUTS

"Up to this point, the market seems to have been far too relaxed about the loss of so much crude oil at a time when inventories are already well below prudent levels," said Paul Horsnell of investment bank JP Morgan.

"Should the position in Venezuela continue to deteriorate, then a push to well above DLRS 30 becomes inevitable," he added.

Fears over supplies were compounded last week when the oil cartel OPEC lowered production quotas.

The Organisation of the Petroleum Exporting Countries, of which Venezuela is a member, controls two-thirds of world supply.

VENEZUELAN STRIKE

Venezuela's oil industry has been severely affected, with oil refinery managers and oil tanker captains joining a strike led by right-wing business groups.

More than 40 oil tankers were anchored off Venezuelan ports waiting to take on oil shipments, shipping agents said.

More than half a million protesters took to the streets of the capital Caracas over the weekend to call for the leftist leader's resignation and early elections.

Venezuela supplies about 14% of US oil needs.

Arab producers have promised to fill any shortfall, but supplies would take more than a month to arrive

PHOTO CAPTION

U.S. Secretary of State Colin Powell said December 16, 2002he expected the United States to release an assessment late this week on Iraq's weapons declaration to the United Nations. Powell speaks about the U.S.-Middle East Partnership Initiative at the Heritage Foundation in Washington, December 12. (William Philpott/Reuters)
- Dec 16 3:05 PM ET