www.austin360.com By STEPHEN IXER Associated Press Writer

CARACAS, Venezuela (AP)--A strike that has almost paralyzed Venezuela's crucial oil industry is an act of ``terrorism'' that has cost the country $4 billion, the energy and mines minister said.

Strikers have tried to cause chaos and violence in our urban areas by impeding the supply of gasoline, diesel and domestic gas,'' Rafael Ramirez said in a televised address Monday. All these acts of terrorism have brought tremendous consequences for the nation.''

Once the world's fifth-largest oil exporter, Venezuela has had to pay $105 million to import more than 2 million barrels of gasoline since a general strike began Dec 2, Ramirez said. It's the first time Venezuela has imported gasoline in almost a century, he noted.

Venezuela's opposition parties and the largest labor union and business chamber called the general strike to pressure Chavez into calling early elections. The walkout is strongest in state oil monopoly Petroleos de Venezuela S.A., where 30,000 of 40,000 workers are off the job.

Oil provides half of government revenue and 80 percent of export earnings.

Venezuela's strike has contributed to an increase in U.S. gasoline prices by 5 cents per gallon in the past three weeks to an average $1.50 a gallon, according to the Lundberg Survey of 8,000 U.S. service stations.

Citing scarce gasoline imports from Venezuela, the U.S. Energy Department said American motorists could pay up to $1.54 per gallon of gasoline this spring even if war is averted in Iraq.

The market underestimated the tenacity of the Venezuelan strikers,'' said Phil Flynn, head of the energy trading desk at Alaron Trading Corp. on the Chicago Mercantile Exchange. People are finally starting to wake up not just to the strike but also to Venezuela's importance as a U.S. supplier.''

Chavez has fought back by firing at least 1,000 white-collar workers at PDVSA.

Ramirez said daily oil production now surpasses 800,000 barrels. Striking oil executives fired by Chavez say output is just over 400,000 barrels a day. Before the strike, production was up to 3 million barrels a day.

Some strike leaders were considering asking small businesses _ who say they cannot sustain losses much longer--to resume work, together with medical workers and teachers, hoping to avoid a popular backlash.

But the strike will continue in the oil industry, said Enrique Naime, a leader of the opposition Democratic Coordinator movement.

Most private schools and some public schools have been closed since the strike started. Hospital workers supporting the strike are only attending emergencies. Many supermarkets have run out of milk and are running low on staples such as flour and drinking water. Many medicines no longer are available at pharmacies.

``At this moment, the doctors' strike could be counterproductive, just like the educational strike could be counterproductive,'' Naime said.

William Davila, another Democratic Coordinator leader, said the food industry also should be given the freedom to ensure basic supplies.

But Davila said any easing of the strike should depend on a forthcoming Supreme Court ruling on the legality of a nonbinding referendum on Chavez's rule. The National Elections Council scheduled the vote for Feb. 2 after accepting an opposition petition signed by 2 million people.

Chavez says the nonbinding vote would be unconstitutional. His presidency runs until January 2007, and Venezuela's constitution says a binding referendum may be held halfway into his six-year term, or August.

During Monday's round of negotiations, which are sponsored by the Organization of American States, the two sides discussed the possibility of amending the constitution to allow early presidential elections, said OAS Secretary-General Cesar Gaviria.

www.globeandmail.com Bloomberg News Tuesday, January 14, 2003 – Page B22

Crude oil rose on expectations that extra oil from a production increase by the Organization of Petroleum Exporting Countries won't reach refineries in the United States until March at the earliest.

On Sunday, OPEC members agreed to boost their targets by 6.5 per cent next month to make up for export disruptions in Venezuela caused by a strike. Tankers take at least six weeks to reach U.S. refineries from Saudi Arabia, which has more spare capacity than other OPEC members.

"We've got supply problems and it doesn't look like they'll be solved any time soon," said Ed Silliere, vice-president of risk management at Energy Merchant LLC in New York, which markets gasoline and heating oil to local distributors. "The big worry continues to be Venezuela."

Wheat futures fell to their lowest in more than six months on expectations that U.S. farmers will boost their harvest at a time of weak export demand.

U.S. farmers raised their winter-wheat plantings by 6 per cent from a year earlier to 44.2 million acres, the highest in five years, the U.S. Department of Agriculture reported on Friday. It also pegged the wheat surplus on May 31, the end of the sales season, at 418 million bushels, or 20 per cent more than expected in December, because of poor sales.

Natural gas futures rose for a fourth session in five on expectations that colder weather in the U.S. Midwest and East over the next two weeks will spur a surge in heating demand.

Freezing temperatures are forecast this week from Chicago to Boston and as far south as New Orleans, according to the National Weather Service. The forecast signals increased furnace use that may trim gas supplies, already down 16 per cent from last year, traders said.

Jan. 10 to Jan. 25 will be the coldest two-week period since late 1995 and early 1996 from the Rocky Mountains to the Atlantic coast, AccuWeather senior meteorologist Bernie Rayno said on Friday.

www.thestar.com Jan. 14, 2003. 01:00 AM Two Norwegian oil fields idled Supply of crude remains very tight

NEW YORK—Oil prices moved back into positive territory yesterday as two oil field closings in the North Sea renewed worries about global supply despite OPEC's weekend decision to raise output.

The Organization of the Petroleum Exporting Countries at an emergency meeting on Sunday increased production limits by 1.5 million barrels per day (bpd), or 7 per cent, to compensate for six weeks of losses of strike-bound Venezuelan supplies.

Crude oil on the New York Mercantile Exchange settled 57 cents (U.S.) higher at $32.25 per barrel. In London, Brent crude broke through $30 a barrel to reach $30.20 a barrel, 53 cents up on the day.

News of two fires on Sunday that halted operations at the 232,000-bpd refinery in Garyville, La., operated by Marathon Ashland Petroleum LLC, helped lift gasoline prices in the United States by 2.41 cents to 89.60 cents a gallon, traders said.

Forecasts of a cold snap in the United States for the period Jan. 10-25 fuelled a rise in heating oil prices by 1.87 cents to 88.40 cents a gallon.

Dealers said the crude rally was triggered by news from Norwegian state oil producer Statoil that two North Sea oil fields shut down yesterday because of technical problems, cutting production by some 165,000 bpd — a minimal amount on a global scale.

"The fact that the North Sea output problem is supporting the market really shows how tight the physical crude supply is," said Lawrence Eagles of GNI Ltd., a broker of futures and options.

Fears that a U.S. assault on Iraq may be only weeks away are helping support prices that late last month hit a two-year high of $33.65 a barrel for U.S. crude.

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

Oil from the Middle East takes four to six weeks to reach U.S. shores, while Venezuelan crude, which normally accounts for 13 per cent of U.S. imports, arrives 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.

Mexico's energy ministry said the country will raise crude oil exports by 120,000 bpd to 1.88 million bpd from Feb. 1 after the OPEC cartel agreed to raise its output. Non-OPEC Mexico is the world's eighth-biggest crude oil producer and one of the top four suppliers to the United States, along with OPEC members Saudi Arabia and Venezuela and non-OPEC Canada.

U.S. President George W. Bush viewed OPEC's decision to raise oil production as "a welcome step," White House spokesperson Ari Fleischer said yesterday.

"The president views OPEC's action to increase production, particularly given the protracted dispute in Venezuela, as a welcome step," he told reporters. "It will increase global energy supplies and support global economic growth."

But there are worries about how much of the extra oil OPEC can actually deliver.

The 1.5 million bpd increase was divided pro-rata among members — meaning Venezuela was also granted its share of the higher output limit despite the 43-day-old strike that has slashed its exports by 80 per cent to 500,000 bpd.

Many others in OPEC have little or no spare capacity to bump up production, leaving Saudi Arabia to provide the lion's share.

The kingdom has moved quickly to implement the OPEC decision, telling oil majors to expect 10-20 per cent more crude in February, industry sources said yesterday.

Crude traders said the hike had reversed Saudi Arabia's January cuts, made to clamp down on quota busting.

Riyadh fears an oil-price shock that would dent demand for its crude should a U.S.-led war in Iraq come before Venezuelan supplies are restored.

Venezuela, OPEC's third-biggest producer, is fifth in world exporter rankings, while Iraq sells up to 2 million bpd overseas under the United Nations oil-for-food program.    

washingtontimes.com By Mike Ceaser THE WASHINGTON TIMES

     CARACAS, Venezuela — From the central Caracas offices of the Afro-Venezuelan cultural organization Grupo Madera, Carlos Cremer has two contrasting views.

     To the north rise the shiny glass-and-concrete skyscrapers from where much of Venezuela's government, including its $40 billion state-owned petroleum industry, is managed. To the south slouches a hillside shantytown where many dark-skinned residents lack title to the land their shacks occupy and water taps flow only on weekends.

     Somehow, while Venezuelan crude oil fuels economies on distant continents, its benefits don't extend a half-mile south to the hillside slum.

     "There's the reality," said Mr. Cremer, pointing to the shacks. "And that's the unreality," he added, gesturing to the towers.

     The drawn-out conflict between President Hugo Chavez and a coalition of business, union and middle-class elements determined to force him from power by shutting down the country's oil industry has focused attention on the two Venezuelas — one comprising about a third of the population that is middle-class or wealthy and generally light-skinned, and the other made up of the two-thirds, who are poor and darker-skinned.

     It was the frustration of the poor Venezuelan majority that swept Mr. Chavez and his "revolution for the poor" to a landslide victory in the 1998 presidential elections.

     Though racial labels are nearly meaningless in this nation, in which most people are of mixed African, Native American and European descent, Mr. Chavez's supporters tend to be mostly poorer and darker, while those trying to oust him are mainly descendents of European immigrants, many drawn by Venezuela's post-1930s oil boom.

     The country is the world's fifth-largest commercial supplier of oil, and the only Latin American member of the 11-nation Organization of the Petroleum Exporting Countries (OPEC).

     Mr. Chavez has made ethnic references in recent speeches, referring to himself as "a black man" and noting that some participants in the opposition movement have European surnames or are foreign-born. In one speech to the nation, he evoked specters from the racist past of the United States.

     "This is similar to that terrifying organization which existed in the United States named the Ku Klux Klan," the president said of his foes — "those men who put on hoods and killed blacks and burned their houses and churches."

     But Venezuela's history does not parallel that of the United States. While slavery existed here until the mid-1800s, Venezuela does not have a legacy of state-mandated segregation. And Mr. Chavez, who is of mixed African, European and Native American descent, is not his country's first dark-skinned president.

     Venezuela's single dominant religion helped negate social barriers between the races, creating a different social history than in the United States, as a glance at the many shades of any Venezuelan crowd makes clear. Venezuelans speak with pride of their nation's racial mix, referring to their varied skin tones as "caffe con leche" — literally "coffee with milk."

     Caracas sociologist Mercedes Pulido points out that many of the nation's Supreme Court justices and other officials have been of mixed race. "It's all caffe con leche," she said — "sometimes with a little more coffee, sometimes with a little more milk."

     During Venezuela's long oil boom that began in the 1930s, waves of southern Europeans migrated to this country and often flourished as professionals or business owners, leapfrogging other groups that had lived here for centuries.

     Caracas political scientist Anibal Romero said Mr. Chavez seeks to foment racial tensions. The president "has said many times that he is the son of Indians and black people, trying to convey the message that those are the only legitimate Venezuelans," Mr. Romero said.

     That message has not struck a chord, he added.

     Still, Mr. Chavez, re-elected in 2000 on a mandate to help the poor, enjoys his strongest support among poorer and darker Venezuelans, despite economic turmoil that has hit the poor hardest. Part of the reason is Mr. Chavez's social programs for them. Another part is the attitudes of the virulent anti-Chavez opposition.

     Carlos Cremer's brother, Nelson, who manages the Grupo Madera center, points out that one of Mr. Chavez's ministers, a black man, has been referred to as "the monkey" by anti-Chavez media.

     And about two years ago, Nelson Cremer recalls, police shut down a Caracas nightclub for illegally refusing to admit blacks. Under previous governments, he added, the club's policy would have been "left as it was."

     Some of the faces in the news also reinforce the ethnic divide.

     In the ongoing face-off over Mr. Chavez's performance in office, several of the president's most ardent defenders are dark-skinned Venezuelans.

     One such is Freddy Bernal, mayor of part of Caracas, and another is Lina Ron, an activist for the homeless during previous administrations, who is now leader of the most radical of Mr. Chavez's popular-support organizations.

     Meanwhile, Mr. Chavez's most prominent business, union and political foes are all white, as were the military officers who ousted Mr. Chavez in a brief coup last April. It is this anti-Chavez coalition — urged on by the media — that has nearly shut down Venezuela's petroleum industry in a 7-week-old attempt to force Mr. Chavez to resign or accept yet another early election.

     In his weekly radio and television broadcast Jan. 12, Mr. Chavez dismissed his opponents as "fascists" manipulated by the media.

     Venezuela's main television stations are not broadcasting any commercials except opposition advertisements promoting the strike. Media owners say they have been pushed into this stance because Mr. Chavez incites his followers to attack reporters.

     Mr. Chavez threatened to revoke the broadcasting licenses of television and radio stations if they "continue with their irrational insistence on destabilizing the country by supporting this fascist subversion."

     The president's opponents blame him for the nation's depressed economy and accuse him of ruling in an authoritarian style.

     The petroleum strike has forced up world crude prices and left the United States, which ordinarily imports about 15 percent of its oil from Venezuela, scrambling to find other sources.

     But the activities of Mr. Bernal and Mr. Ron have been controversial. Both are accused by Chavez opponents of supporting and even arming the militant pro-government Bolivarian Circles, which are said to have carried out violent attacks on opposition targets.

     Carlos Correa, general coordinator of the human rights organization Provea, said that while some in the opposition have referred to black members of Mr. Chavez's government using racial slurs, Mr. Correa does not consider that a sign of a racist society.

     "They are an expression of [political] intolerance," he said, "a result of the political debate."

     Rosaura Zan, a black woman from a poor Caracas neighborhood, is a regular at a Caracas plaza where a group of dissident military officers puts on a nonstop protest demanding Mr. Chavez's resignation.

     Mrs. Zan said she wants the president out because of what she called his administration's corruption and unfulfilled promises to aid the poor.

     "Color has nothing to do with it," she said. "If [Mr. Chavez] had done things well, then I wouldn't have cared what color he was, either. But he's done things badly from the start."

washingtontimes.com By Tom Carter THE WASHINGTON TIMES

     Venezuela announced plans yesterday for President Hugo Chavez to travel to New York to meet with U.N. Secretary-General Kofi Annan amid international efforts to end a crippling nationwide strike.

     Mr. Chavez's trip on Thursday coincides with U.S. efforts to bring international pressure on him to accept early elections.

     A 43-day-old strike has crippled Venezuela's economy, shut down its oil exports and caused U.S. gasoline prices to jump.

     On Friday, White House spokesman Ari Fleischer said the administration was looking for ways to support mediation efforts currently under way by Organization of American States Secretary-General Cesar Gaviria, including through the creation of a "Friends of Venezuela" group of interested countries.

     U.S. Ambassador to Venezuela Charles Shapiro said yesterday in Caracas that presidents from the region would discuss the crisis when they meet in Quito tomorrow for the swearing-in of new Ecuador President Lucio Gutierrez.

     "They will hold conversations and I think that we will reach some agreement on the group of friends. This is very important," Mr. Shapiro said.

     Meanwhile, there were new clashes yesterday between Chavez supporters and opponents.

     At his Jan. 1 inauguration, Brazilian populist President Luis Inacio Lula da Silva proposed a "group of friends" initiative, in which outside nations would help mediate an end to the strike.

     Mr. Chavez hailed the Brazilian proposal and the United States rejected it, fearing the group could be stacked with supporters of Mr. Chavez.

     The U.S.-supported group would continue to be directed by Mr. Gaviria, who has been working for months to end the stalemate.

     The United States is proposing a timetable for new elections and an end to the strike by opponents of Mr. Chavez.

     "We have been working with people in the region, talking with people for several weeks now. There is an effort to try to energize things," said a State Department official yesterday, on the condition of anonymity.

     The official said that the United States would be a part of a "Friends of Venezuela" group that might include Brazil, Mexico, Chile and maybe Spain as well as the United Nations.

     "The value of a friends group is that you can demonstrate to the government and to the opposition that we are neutral," the official said.

     The United States imports about 15 percent of its oil from Venezuela. Before the strike, which began Dec. 2, reduced Venezuelan oil exports to a trickle, the United States received 1.5 million barrels of Venezuelan crude a day.

     Now, with possible war on Iraq looming and prices at the pump rising, the United States is hoping to help broker a resolution.

     Venezuela has been in crisis since a short-lived military coup last spring. Because the United States at the time gave tacit backing to Chavez opponents, it had been reluctant to become involved.

      But that has changed.

     "Chavez got a real boost from his visit to Brasilia [in early January for Lula da Silva's inauguration] and came back thinking that if he just dug his heels in he would win," the State Department official said. "Both sides have been unwilling to move. There is a potential for deepening violence if the strike goes on."

     •This story is based in part on wire service reports.