The threat of a war with Iraq has continued to push up oil prices, with analysts warning that further price rises are likely.

The price of US light crude oil has risen 8.7% in the last four days alone, and on Monday stood at $30.20 per barrel.

The $30 per barrel mark is considered crucial benchmark in oil prices - a breach of that level usually indicates a potentially serious threat to supply.

Ministers from the Organisation of Petroleum Exporting Countries (OPEC) are due to meet later this month to discuss market conditions and production levels.

'War premium'

The US stepped up calls for an attack on Saddam Hussein over the weekend, quoting new evidence that the Iraqi leader was trying to make a nuclear bomb.

The Middle East sits on about two thirds of the world's crude oil reserves, but military action in the region could hamper the flow of oil elsewhere.

Traders have estimated that the threat of attacks has created a "war premium" of between $4 to $6 per barrel.

And they say continued threats could push the price even higher.

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

Opec

Opec ministers are meeting in Osaka, Japan, on 19 September, with possible increases in oil production on the agenda.

Opec output is currently at its lowest level for 10 years and some analysts say production should be increased to avoid a shortage in the winter months.

But Opec members are reportedly divided on the issue, with Algeria and Saudi Arabia keen to release more supplies while Kuwait, Iran and Venezuela support the current limits.