www.wgrz.com

VIENNA, Austria (AP) -- OPEC members agreed Sunday to boost the cartel's oil production target by 6.5 percent to cover a shortfall in crude exports from Venezuela.

The increase of 1.5 million barrels a day would take effect on Feb. 1, OPEC President Abdullah bin Hamad Al Attiyah told a news conference.

The Organization of Petroleum Exporting Countries announced the increase in the hope of calming fears of a supply crunch caused by an ongoing strike in Venezuela. The strike, launched Dec. 2 by political opponents seeking to oust President Hugo Chavez, has slashed the country's exports by about 2 million barrels a day. Venezuela, a major supplier to the United States, is normally the world's fifth-largest oil producer and the third largest in OPEC.

"OPEC is trying to send a very strong message that it will do its utmost to stabilize demand and supply," Al Attiyah said after delegates reached their decision in informal talks.

"Now we will wait for the market to react," he said.

OPEC's new production ceiling is 24.5 million barrels a day. The group would review its decision when it meets again in March, Al Attiyah said.

OPEC pumps about a third of the world's crude supplies, which total 79 million barrels a day.

The output hike was at the upper end of what analysts had expected. It appeared to contradict Saudi Arabian Oil Minister Ali Naimi's comment earlier in the day that the ceiling should remain at 23 million barrels a day. Saudi Arabia is OPEC's most influential member, and it has the bulk of the cartel's spare production capacity.

Crude prices surged in recent weeks but fell sharply in anticipation of OPEC's boosting production. Fears about a possible U.S.-led war against Iraq have added upward pressure to world oil prices. Iraq has the second-biggest oil reserves after Saudi Arabia, and there has been a steady buildup of U.S. troops in the Persian Gulf.

On the New York Mercantile Exchange, February contracts of light, sweet crude futures fell 31 cents Friday to close at $31.68. On London's International Petroleum Exchange, February Brent crude ended at $29.67 a barrel, up 3 cents.

Al Attiyah confirmed that OPEC's price target remains $22 -$28 per barrel of its benchmark blend of crudes.

The suddenness of OPEC's decision to call this meeting reflects its surprise at the deterioration in market conditions. Oil ministers for four of the group's 11 members were unable attend due to prior commitments.

A fifth minister, Libya's Abdulhafid Mahmoud Zlitni, was due to arrive Sunday but canceled his trip because a sandstorm prevented his plane from leaving the Libyan capital, Tripoli.

onebusiness.nzoom.com

Tens of thousands of Venezuelan anti-government protesters marched on military headquarters in Caracas on Sunday after leftist President Hugo Chavez threatened to take over private banks and schools hit by a six-week-old opposition strike.

Former paratrooper Chavez, who is refusing opposition demands to resign and call early elections, has vowed to take all necessary measures to beat the strike, which has already slashed oil exports by the world's No. 5 petroleum exporter.

Several hundred National Guard and military police in riot gear, formed up behind barbed wire barricades and backed by armoured vehicles, blocked an avenue leading to Fuerte Tiuna military headquarters in the southwest of the city on Sunday.

Blowing whistles and waving national flags, the opposition marchers headed toward the sprawling military complex in a repeat of a Jan. 3 protest that broke up in violence when anti- and pro-government demonstrators, troops and police clashed. On that occasion, two Chavez supporters were shot dead and dozens more people injured.

Six weeks into the gruelling opposition strike, feelings were running high on the opposition side after defiant speeches by Chavez on Saturday in which he blasted his foes as "terrorists" and said his government would not surrender to the strike.

Hardening his stance, Chavez warned his opponents his government would intervene in banks and schools shut by the strike and would sack directors and staff who refused to work.

As his opponents marched on Sunday, the outspoken populist president began his weekly "Hello President" television and radio show by calling his foes "fascists and coup mongers".

He also threatened to revoke the broadcasting licenses of private TV stations that are fiercely critical of his rule.

The strike has rocked Venezuela's oil-reliant economy and sent its bolivar currency tumbling. It has also sent shockwaves through world oil markets and the oil exporters' cartel OPEC agreed on Sunday to raise production to stave off a spike in oil prices threatened by the Venezuelan strike.

In his tough speeches on Saturday, Chavez said 2,000 striking employees of the state oil giant PDVSA had been dismissed.

"This was a declaration of war. Chavez is not interested in dialogue or reconciliation," glass artist Luz Marina Urrecheaga said on Sunday as she and other opposition protesters harangued helmeted troops blocking their path to Fuerte Tiuna.

"What we want are elections now, and the right to march in peace," said another demonstrator, surgeon Carmen Granados.

Troops set up another cordon several hundred yards (metres) away to keep back angry pro-Chavez militants.

"We will do everything possible to a avoid a clash," military police commander Col. Jose Montilla said.

Daily life disrupted

The strike has increasingly disrupted daily life in Venezuela. Venezuelans have been experiencing unprecedented shortages of gasoline, cooking gas and some food items.

Major private manufacturing industries, shopping malls and cinemas have stayed closed and most private schools have failed to open this year as teaching staff stayed away from work. Most public schools, however, have started classes.

Bank workers staged a 48-hour stoppage last week, but will reopen on Monday under restricted service hours which have caused long daily lines outside banks.

Chavez, who was elected in 1998 and survived a brief coup in April, portrays himself as a champion of the poor and says wealthy and corrupt minority elites are trying to topple him from power. He says his self-proclaimed "revolution" is aimed at helping the majority of Venezuelans who live in poverty.

Chavez's foes, who are largely drawn from the country's middle and upper classes, accuse him of dragging Venezuela toward chaos and Cuban-style communism through dictatorial rule, mismanagement and corruption. They say his support has reached an all-time low, even among the poor.

With government and opposition deadlocked over the timing of elections, fears of a violent outcome have increased after a grenade attack last week against the Algerian ambassador's Caracas residence and bomb threats against several embassies.

The United States and other countries, such as Brazil, are backing the idea of a group of "friendly countries" to persuade the government and opposition to reach a negotiated settlement in talks brokered by the Organization of American States.

Opposition leaders announced plans to travel to the United States this weekend to present their case to United Nations Secretary General Kofi Annan and the US State Department.

The opposition is pinning its hopes on a Feb. 2 referendum on Chavez's rule scheduled by electoral authorities. But the president rejects this nonbinding referendum as unconstitutional and says he will ignore its result.

He says his foes must wait until August after which the constitution allows for a binding referendum on his rule. His current term is scheduled to end in early 2007.

abc.net.au Mon, Jan 13 2003 7:56 AM AEDT

An emergency meeting of Organisation of the Petroleum Exporting Countries (OPEC) ministers in Vienna has announced an increase in oil production of 1.5 million barrels a day.

The decision is aimed at calming an anxious market.

A strike in Venezuela and the possibility of war in Iraq two issues OPEC oil ministers were trying to untangle in a two-day meeting in Vienna.

Ongoing industrial action in Venezuela is denying the oil market some two million barrels a day.

That production shortfall and the threat of war in Iraq have sent prices above $US33 a barrel for the first time in two years.

OPEC leaders say the decision to increase production is a temporary one, to shore up supplies and take some of the heat out of prices.

Oil analyst Raad Alkadiri says OPEC had no other choice but to increase production and take the heat out of prices.

"Looking at it financially, obviously OPEC stands to benefit from higher prices," Mr Alkadiri said.

"But I think OPEC is also is trying to show - and Saudi Arabia in particular is trying to show - that their policy of an adequate price for both suppliers and consumers is something that they adhere to.

"They know that high prices cause political problems, they know that higher prices in the long term also cause economic problems."

business-times.asia1.com.sg January 13, 2003

(LONDON) Oil prices fell back last week after the Organisation of Petroleum Exporting Countries (Opec) oil ministers signalled they were ready to pump more oil to ward off an oil price spike threatened by a strike in Venezuela and the spectre of a war in Iraq.

But prices later recouped much of the losses amidst worries that crude will remain in short supply even after the extra crude eventually hits the market.

GOLD: Gold prices rose to US$356.10 per ounce at the start of last week on the London Bullion Market, the highest fixing since March 1997. By Friday afternoon, an ounce of the precious metal was fixed at US$353 per ounce against US$344.5 the previous week.

'A couple of things are driving it, the most significant being I think the continued weakness of the US dollar - this has attracted further speculative buying, particularly on the New York Comex floor,' said UBS Warburg analyst John Reade.

SILVER: Silver was fixed on the London Bullion Market at US$4.84 an ounce last Friday afternoon against US$4.785 the previous week.

PLATINUM and PALLADIUM: By last Friday, an ounce of platinum had firmed to US$618 on the London Platinum and Palladium Market from US$603 the previous week. Palladium rose to US$267 per ounce from US$236.

BASE METALS: Base metals prices rose in response to glimmers of hope seen in US economic data and strong demand for market leader copper.

On the London Metal Exchange (LME), three-month copper prices rose to US$1,642 per tonne from US$1,607 the week before. Three-month nickel prices rose US$410 per tonne to US$7,910 per tonne.

Three-month aluminium prices dipped US$5 per tonne to US$1,353. Elsewhere in the complex, three-month lead prices added US$2 per tonne to US$446, tin won US$65 per tonne to US$4,435 and zinc prices firmed US$11 per tonne to US$785.

OIL: On Friday, the price of benchmark Brent North Sea crude oil for February delivery stood at US$29.88 a barrel, against US$30.22 a week earlier.

In New York, February-dated light sweet crude futures traded at US$31.99, down from US$32.57 a week earlier.

RUBBER: In Kuala Lumpur, the RSS index rose to RM3.280 per kg from RM3.185 the previous week.

COCOA: On Liffe, London's financial futures exchange, the price of cocoa for May delivery climbed to 1,380 a tonne on Friday from 1,362 the previous week. On the CSCE, the New York futures market, the May contract gained to US$2,137 per tonne from US$2,082.

COFFEE: On the CSCE market, Arabica for March delivery fell to 62.70 US cents a pound last Thursday from 64.05 US cents the previous week.

On Liffe, Robusta quality for March delivery fell to US$825 a tonne last Thursday from US$845 the previous week.

SUGAR: On Liffe, a tonne of white sugar for March delivery rose to US$218 last Thursday from US$214.6 a week earlier.

On the CSCE, a pound of unrefined sugar for March delivery fell to 7.59 US cents from 7.69 US cents the previous week.

SOYA: On the Chicago Board of Trade (CBoT), a bushel of soya for January delivery advanced to 586.50 US cents last week from 584.50 US cents the previous week. Soyabean meal - used in animal feed - for January delivery fell to US$168.8 per tonne last week from US$171 the previous week.

Allendale analyst Joe Victor in Chicago said prices had shot up after China delayed signing the deal with Argentina.

The market received further bad news in the form of statistics from the US agriculture department, whose weekly export figures showed that 386,000 tonnes of soya had been exported.

GRAINS: Grain prices nudged higher, helped by an order placed by Egypt for 180,000 tonnes of soft winter wheat from the US.

But prices pared gains in response to disappointing weekly US export figures from the US agriculture department and an increase in subsidies to European wheat exporters, said Dan Cekander, US-based analyst with brokerage firm Fimat.

In Chicago a bushel of wheat for March delivery rose to 329 US cents last Thursday from 328.75 US cents a week earlier. A bushel of maize in Chicago for March delivery gained to 243.50 US cents from 237 US cents the previous week.

On Liffe, the price of a tonne of wheat for January delivery increased to 59.30 from 58.75 a week earlier.

COTTON: Cotton prices slipped back from recent highs as large speculative flows offset strong US export figures.

'Cotton prices are at high levels at the moment, but the market is a bit wary because of a very large speculative volume,' said Refco analyst Philippe Pesque.

In New York, the March contract fell to 51.06 US cents a pound last Thursday from 52.01 US cents the previous week.

The Cotton Outlook Index of physical cotton, the average of the world's lowest prices, inched up to 56.70 US cents from 56.50 US cents.

WOOL: Australian wool prices got off to a flying start when auctions re-started last week.

'The resumption of auction sales after a three-week break saw prices increase by 2 per cent on average,' the Australian Wool Industries Secretariat reported.

'Demand was led by the topmakers during last week. Purchases for China were relatively small, by their standard, and trade expectation is that this may remain so over the immediate period,' the secretariat added. The Australian Eastern index rose to A$11.89 per kg from A$11.65 before Christmas. The British Wooltops index was unchanged at 570 pence. - AFP

www.theage.com.au Monday 13 January 2003, 07:30AM

The OPEC oil cartel agreed Sunday to increase oil production by 1.5 million barrels per day (bpd) in a bid to curb a surge in prices triggered by a strike in Venezuela and the threat of war in Iraq.

The 11-nation Organisation of Petroleum Exporting Countries (OPEC) agreed to raise its combined output ceiling by 6.5 per cent to 24.5 million bpd from next month to try to cool feverish world oil markets.

"We are trying to send a strong message to consumers that we are doing our utmost to stabilise the whole market," OPEC President Qatar Oil Minister Abdullah bin Hamad al-Attiyah said.

He said the Venezuelan crisis had taken over two million bpd of oil off world markets, adding that OPEC would roll back the output hike once Venezuelan exports recovered.

"We will respond very quickly when Venezuela reaches a quantity that will accommodate their market share," Attiyah said.    advertisement       advertisement

The quota increase is spread across the 10 OPEC members excluding Iraq, boosting Venezuela's ceiling to 2.82 million bpd, although Attiyah said the South American country was currently only producing 700,000 million bpd.

The new quotas also give top producer Saudi Arabia room to sell 488,000 more barrels of oil, with a quota rising to 7.96 million bpd and for the next largest producer Iran to sell 220,000 more barrels of oil with a quota of 3.6 million bpd.

The slump in Venezuelan exports has sent prices soaring above OPEC's 22-28 dollars per barrel target price.

Crude prices surged above 30 dollars a barrel in London, even reaching 33 dollars in New York recently, before easing back slightly.

Although high oil prices boost producers' revenues, OPEC is concerned that a price spike would jeopardise a global economic recovery and prompt consumers to switch to alternative sources of energy, thereby depressing oil demand.