sg.biz.yahoo.com Monday January 13, 12:20 PM

SINGAPORE (Dow Jones)--Crude futures on New York Mercantile Exchange fell early Monday as after-hours Access trading commenced, in a knee-jerk reaction to news the Organization of Petroleum Exporting Countries will hike its output ceiling by 6.5% to stabilize jittery oil markets.

But crude futures subsequently managed to recover some of the earlier losses as participants realized the selling was overdone, and the size of the output hike was in line with what the market had been expecting.

But even though the OPEC output rise was within expectations, the news will continue to weigh on crude futures, participants say.

Select from the most reliable agencies  At 0410 GMT, the February Nymex contract was trading at US$31.56 a barrel, down 12 cents from Friday's floor trade close, after falling as much as 45 cents to US$31.23/bbl early in the session.

"Basically we sold off on the back of the OPEC news, and the general perception was that the market was overdone," said a Nymex broker, explaining the early losses in the session.

"But the market was expecting an increase of 1.5 million b/d, so there was no reason to sell off 50 cents at the open. The market overreacted to the headlines, because (an output hike of 1.5 million b/d) was already priced in," he added.

Most of the trading volume was from the U.S., with a total of 2,189 lots traded shortly before midday in Singapore.

"It could be that the U.S. (participants) are a little less aware of what's going on with OPEC ... and have pushed the market down. While in the Far East, Europe, (traders) have already priced it down," the broker said.

Range-Bound Trade Likely

For the rest of the Access trading session, Nymex crude futures will likely hold in a US$31.55-US$31.70/bbl, trending to slightly lower as news of the OPEC output hike puts a slight damper on market sentiment.

"Regardless of the fact that the market has already priced in (the 1.5 million b/d output hike), the news is going to cause a little bit of bearishness," the broker said, adding reports that Venezuela loaded a ship Friday also weighed on the market.

Good support will be provided at US$31.20/bbl, a consistent technical level "on the up and down swings over the last couple of weeks," the broker said. Beyond that, US$30.60/bbl will provide further support.

"At the moment we're in a little of a downtrend that's a week and a half old. To break out of that, we're looking at a move back up above US$32.40/bbl, and we have to get through US$32.60/bbl," he said. "But until we get through there, it's going to range trade and hover around current ranges."

On the London International Petroleum Exchange, Brent crude futures will also likely trend modestly lower. On Friday, nearby February Brent ended at US$29.67 a barrel, up 3 cents.

At its extraordinary meeting in Vienna Sunday, OPEC settled for a hike of its output ceiling by 1.5 million barrels a day to 24.5 million b/d, effective Feb. 1.

Oil prices have risen in recent weeks as the disruption to Venezuelan oil exports due to a prolonged strike in that country tightened supplies, notably to the key U.S. market.

Sunday's agreement was pushed through by Saudi Arabia, OPEC's largest exporter. Ali Naimi, the Saudi oil minister, said the supply shortfall resulting from the Venezuelan political crisis amounted to 2 million b/d.

He pledged that OPEC wouldn't allow an actual shortage of oil to develop.

The OPEC decision was swiftly followed up on Monday by the Saudis, who told South Korean costumers that in February they would supply more crude oil under their long-running term contracts than they had in January.

Saudi Arabian Oil Co. (C.SOI), or Saudi Aramco, made a 5% cut to February-loading term crude supplies to South Korea, compared with a much sharper 21%-22% cut for January's supplies, Seoul-based traders said Monday.

"The small cut means more term crude supplies given to us by Saudi Aramco, in line with OPEC's decision to increase output," a South Korean buyer said.

The same proportionate change is expected to apply to Saudi Arabia's February-loading term crude supply for Japan and Taiwan. Japanese markets are closed Monday.

-By Irene Kwek, Dow Jones Newswires; +65-64154062; irene.kwek@dowjones.com

www.chron.com Jan. 12, 2003, 10:09PM By MAE GHALWASH

The political, social and economic turbulence that started in April in Venezuela has sparked a patriotic fervor among members of the Venezuelan-American community in Houston, prompting them to reach out to each other and rediscover their culture.

Hundreds of Venezuelan-Americans have turned out for four major cultural and social gatherings -- during which not a hint of politics was raised -- since April, said Cristal Montanez Joslin, a spokeswoman for the Venezuelan-American Association of Texas, which arranged the events.

"Many people don't like political activities, so we have to work on what people like: the culture that is being lost," Joslin said.

"The culture is not being showcased or shared," she added. "It is our responsibility to develop the cultural talents within the community."

Venezuela's troubles began when clashes erupted over President Hugo Chavez's state oil policies. Chavez survived an earlier coup attempt, but the country remains divided over his rule. Chavez's opponents, mostly members of the elite oil sector, claim he is destroying the country's democracy and economy. His supporters, mostly the poor, accuse the oil giants of using the sector to augment their own bank accounts.

In December, oil workers started a strike to force Chavez from office, and the streets of Caracas have been filled with mass demonstrations in support of the strike and counterdemonstrations in support of Chavez. The strike has crippled Venezuela's oil production, the country's chief source of revenue. Venezuela is the Organization of Petroleum Exporting Countries' third-largest producer.

The tensions in Venezuela spread to Houston, with anti-Chavez activists staging demonstrations in front of the Venezuelan consulate, five in December alone.

Although those protests received wide local attention, each attracted just over 100 protesters, said Joslin. But nearly 500 Venezuelan-Americans attended each of four cultural and sporting events, Joslin said.

Some Venezuelan-American parents used the cultural events to introduce their American-raised children to their heritage. Children who did not read Spanish, or knew little of Venezuelan music, literature or dance, were soon reading and memorizing songs and poetry in Spanish to recite at the gatherings.

For one event, a children's choir was formed to sing Spanish songs, while other children performed Venezuela's national Joropo dance and still others performed in a musical recital featuring the Venezuelan cuatro, a small, guitar-like instrument.

The most popular of the events was a baseball game, which brought Venezuelan-American teenagers and their families together with others in their community, Joslin said. Some 500 people attended that event.

"I have met more Venezuelans since April than in my almost 25 years here in Houston," said Joslin.

www.forbes.com

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MONDAY, JANUARY 13

HOLIDAYS

Japan (Coming of Age Day - No major events scheduled)

OPEC LIFTS PRODUCTION TO TAME OIL PRICES

OPEC on Sunday agreed to raise production to stave off

an

oil price shock threatened by a strike in Venezuela and

war in Iraq. Oil prices held steady in Asia on Monday as

the hike was seen as too little, too late. For more,   

double click on [nSP130797]. N/A - G10 CENTRAL BANKERS HOLD REGULAR BIS MEETING, Basel

Group of 10 central bankers hold a regular meeting at

the

Bank for International Settlements. 0930 - UK DECEMBER

PRODUCER PRICES, London

November input prices fell 3.4 percent on the month and

0.9 percent on the year while output prices slipped 0.2

percent on the month and gained 1.2 percent on the year.

Final M0 money supply for December is also due. N/A  -

GERMAN NOVEMBER INDUSTRIAL PRODUCTION INDEX

Industrial output fell 1.3 percent on the month in

October and 1.4 percent on the year. 1700 - ECB CHIEF

ECONOMIST ISSING SPEAKS, Frankfurt

Otmar Issing makes closing speech at forum for

international financial journalists.

DEBT AUCTIONS

Italian Treasury auctions 3-, 5- and 30-year fixed rate

bonds paying coupons of 3.5, 3.5 and 5.75 percent

respectively. Subscriptions close at 1000 GMT.

TUESDAY, JANUARY 14 N/A - JAPAN CABINET MEETING, Tokyo

 Cabinet meeting followed by minister's regular news

 conferences, including Finance Minister Masajuro

Shiokawa

 and Trade Minister Takeo Hiranuma. N/A  - WORLD BANK

PRESIDENT VISITS TOKYO

James Wolfensohn visits Tokyo from January 14-17. 2350

(Mon) - JAPAN DECEMBER MONEY SUPPLY, BANK LENDING, Tokyo.

The Bank of Japan releases December money supply and

bank

lending data. Money supply rose 3.2 percent in November

from a year earlier, while bank lending fell 4.7

percent. 0000 - JAPAN ECONOMICS MINISTER TAKENAKA IN AUSTRALIA, Canberra

Japan's Economics and Financial Services Minister Heizo

Takenaka speaks at the Australian National University.

0500 - JAPAN NOVEMBER MACHINERY ORDERS, Tokyo

Core machinery orders fell 4.1 percent in October from

September.

DEBT AUCTIONS 0120 - Japan's Ministry of Finance offers

one-year Treasury

bills, results announced 0340 GMT. 0130 - Japan's MOF

announces issue amount of 30-year JGBs.

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www.morningstar.ca 12 Jan 03(10:19 PM) |  E-mail Article to a Friend

By Tanya Pang

SINGAPORE (Reuters) - Oil prices held steady on Monday, shrugging off OPEC's weekend pact to raise supplies as being too little, too late to lift wafer-thin U.S. fuel stocks anytime soon.

The Organization of the Petroleum Exporting Countries agreed at an emergency meeting in Vienna on Sunday to increase official production limits by 1.5 million barrels per day (bpd) to compensate for six weeks of losses in strike-bound Venezuelan supplies.

U.S. light crude tumbled almost 50 cents in early trade to an intraday low at $31.20 a barrel, but quickly recovered to stand six cents down at $31.62 at 0245 GMT.

Analysts said prices were little changed as traders saw no short-term relief for U.S. crude inventories, which are hovering just above 26-year lows as the stoppage in Venezuelan exports eats into supplies to the world's biggest oil consumer.

Oil from Middle East suppliers takes four to six weeks to reach U.S. shores, while Venezuelan supplies, which account for 13 percent of U.S. imports, arrive in about five days.

"There are delays in getting oil from the Middle East to the United States, plus OPEC's agreement is for 1.5 million barrels per day, but prior to the strike Venezuela production was about 2.5 million," said David Thurtell, commodities strategist at Commonwealth Bank in Sydney

"The global market is going to remain tight and with ongoing war fears, you've got to be pretty brave to sell oil at the moment," said Thurtell.

ALARM BELLS

The Middle East-dominated cartel fears an oil price shock if a U.S.-led war in Iraq should come before Venezuelan supplies are restored.

Venezuela, OPEC's third-biggest producer, is fifth in world exporter rankings, while Iraq sells up to two million bpd overseas, which could be disrupted if war breaks out.

The strike and the looming threat of war pushed U.S. crude to a two-year high at $33.65 at the end of December, setting off alarm bells that a run of high energy bills would damage the fragile global economy.

OPEC President Abdullah al-Attiyah said on Sunday OPEC would meet again if Venezuela restores full production. OPEC has scheduled an ordinary ministerial meeting for March 11.

OPEC's agreement brings the cartel's official production ceiling for its 10 members bound by quotas to 24.5 million bpd. Iraq sells oil under the United Nations' oil-for-food program and is excluded from OPEC's quota system.

Analysts saw little chance of prices heading below $30 despite the additional OPEC crude. Actual new oil to hit the world's 76 million bpd market would be limited, they said.

OPEC's latest increase was divided pro-rata among members, meaning Venezuela was also granted its share of the higher output limit despite the strike, which entered its 43rd day on Monday and has slashed oil exports to roughly one-fifth, or 500,000 bpd.

Many others in OPEC have little, or no, spare capacity to bump up production.

"I certainly see oil staying above $30 until the Venezuelan situation is sorted out," said Paul Ashby, oil and gas analyst at ABN Amro in Sydney.

www.washingtonpost.com Reuters Monday, January 13, 2003; Page A16

CARACAS, Venezuela, Jan. 12 -- Venezuelan troops fired tear gas today to disperse tens of thousands of protesters as President Hugo Chavez ordered a crackdown against a six-week-old opposition strike that is bleeding the economy.

Chavez warned opponents he would not let them disrupt schools, banks or food supplies with the strike, which has already crippled shipments by the world's No. 5 oil exporter.

"They want to break us economically. They are not going to do it. I swear it by God and my mother," Chavez said during his weekly television and radio show.

During his broadcast, Chavez signed a decree creating a special government commission to combat a tax rebellion announced by opposition leaders. By urging Venezuelans not to pay taxes, the strikers hope to cut government revenue already drained by the oil strike.

The president, elected in 1998, said the strike was costing the country tens of millions of dollars a day. Chavez, who has already fired 2,000 striking state oil employees, repeated threats to send troops to take over private factories and warehouses if they hoarded food supplies.

He also threatened to revoke the broadcasting licenses of private TV stations that criticize his rule. He described their hostile programming as "worse than an atomic bomb."