SINGAPORE -- Oil prices were higher in Asian Trading Tuesday, hitting $36.78 a barrel on news the United States and its allies have submitted a draft UN resolution pushing for military action to disarm Iraq.

Economists said the higher prices are beginning to blur the second-half economic outlook for Asian economies.

New York light sweet crude for April delivery was at $36.78 a barrel in after hours trading, up 30 cents from the close, and moved between a high of $36.84 and a low of $36.49.

The United States, Britain and Spain submitted on Monday a draft resolution stating Iraq had failed to rid itself of weapons of mass destruction and calling on the United Nations Security Council to take action.

Traders cautioned that if the resolution failed to get through the UN Security Council, it would mean prices would remain higher on continued uncertainty, which would further hit Asian economies.

The impact of higher crude prices have already spread to most other commodities and consumer products, resulting in rising inflation, which would eventually affect Asian economic growth prospects, said Song Seng Wun, an economist at Singapore brokerage G.K. Goh Research.

"We can live with the short term higher prices," Song said, but adding that continued uncertainty in the Middle East would mean the higher prices would linger.

Traders said the market was already on the high side, with many projecting a $40 to $45 price range if war breaks out. (AFP)