www.stuff.co.nz 16 January 2003

NEW YORK: Oil prices jumped toward two-year highs on Wednesday as US crude stocks sank to nearly their lowest level in more than two decades.

A 45-day oil workers' strike in oil exporter Venezuela has drained world oil stocks.

Fresh signs of a looming US-led war on Iraq further fired supply concerns that have pushed prices up more than 30 per cent in two months and reinforced fears that rising energy costs could stunt economic recovery in the US.

New York light crude closed 83 cents higher at US$33.25 a barrel, within 40 cents of two-year highs struck in late December.

Brent crude futures in London rose 61 cents to US$31.22 a barrel, just three cents below a new two-year-high of US$31.25.

US government data showed crude oil stockpiles fell more than 2 per cent to 272.3 million barrels last week, just 2 million barrels above the lowest level since the government started keeping records in 1979.

The report strengthened fears of an oil supply crunch as the US, the world's biggest consumer of oil, enters peak winter heating demand. Frigid temperatures are forecast in the US's northeast - a heavy consumer of heating oil - in the next 10 days.

The Energy Information Administration warned that "localised disruptions" would occur at US refineries if US crude oil inventories fell below 270 million barrels.

www.voanews.com Ralph Kurtenbach Quito 16 Jan 2003, 00:14 UTC AP

Lucio Gutierrez Ecuador swore in a new president on Wednesday, an army colonel who three years ago helped stage a coup that unseated then unpopular president Jamil Mahuad.

In an hour-long speech outlining his plan to rebuild Ecuador, Colonel Lucio Gutierrez pledged to clean out corruption, build the economy and fight poverty. The president said his government plans to move quickly to increase a government subsidy for the poorest, with more improvements for the poor later in his term.

In addition he proposed a national nutrition security fund, supplied in part by the country's food processers. "In my government," the president said, "we will have all food processers channel to the food security fund their non-saleable wares to apply toward a national nutrition plan." He then quoted from a common saying, "When the poor cannot eat, the rich must not sleep."

Seven Latin American presidents were among the guests at the inauguration, including leftist leaders Fidel Castro of Cuba and Venezuela's Hugo Chavez.

President Gutierrez is a political outsider, elected in November over a banana exporter whose campaign was better financed. The new leader's name first became known to Ecuadorians during a January 2000 coup when he and other renegade military officers helped protesting Indians to throw out Mr. Mahuad in a short-lived coup.

Mr. Gutierrerz was jailed, then resigned to enter politics. With rising crime in Ecuador, the President said he wants excellent security that protects children, senior citizens and the disabled.

His speech was interrrupted numerous times by applause.

The new president promised to recover the country's pride and national unity. But his efforts may run into trouble in the country's Congress, where his coalition holds only 17 of 100 seats.

2003-01-16 / Taiwan News, Staff Reporter / By Lisa Wang Formosa Petrochemical Corp., a unit of the Formosa Group, announced unexpected price cuts on local petroleum products yesterday, saying that high international crude oil prices could level off again in the near future in view of OPEC's decision to increase output.

Local petroleum giant Chinese Petroleum Corp., however, decided to keep its prices steady saying that international crude prices will continue to fluctuate, hitting a high of US$32 per barrel.

"We do not see any room for price cuts in the short term," the state-run company said in a statement.

Though crude oil prices climbed on fears of a U.S.-Iraq war and the prolonged oil workers strike in Venezuela, private oil provider Formosa said it expected prices to fall in reaction to the Organization of Petroleum Exporting Countries' promise to raise production quotas.

Formosa cut the price of its unleaded gasoline by NT$0.5 per liter. The new retail prices of 98 unleaded gasoline, 95 unleaded gasoline and 92 unleaded gasoline are NT$21.4, NT$20.1 and NT$19.4 per liter, respectively. Diesel has also been reduced by NT$0.2 per liter to NT$15.5. The new prices take effect today.

In response to Formosa's price cuts, the CPC authorized its gasoline stations to adopt flexible measures with regard to price.

CPC's gas stations are allowed to revise gasoline prices downward by a maximum of NT$0.8 per liter, said Liao Tsang-long (…¿s), manager of CPC's press coordination department.

"I believe most of our gas stations will follow our rival's NT$0.5 reduction," said Liao.

National Petroleum Corp. also said yesterday it would follow suit.

The last petroleum price adjustments were recorded on January 9 when CPC and Formosa raised gasoline prices and diesel by NT$0.5 per liter and NT$0.2 per liter respectively. Formosa's latest price cut has brought petroleum prices back to the pre-January 9 level.

Amid fierce competition in the wake of market liberalization, price adjustments by local petroleum providers have been in tandem, in a bid to prevent a potential loss of customers.

However, such price strategies recently drew the attention of the Fair Trade Commission, which warned the island's three largest petroleum providers - China Petroleum Corporation, Formosa and Esso Petroleum Taiwan Inc. - that joint price adjustments could risk breaching fair trade laws.

washingtontimes.com

     QUITO, Ecuador, Jan. 15 (UPI) -- Brazil's president Wednesday called for a diplomatic solution to the general strike crippling neighboring Venezuela, which has endured more than a month of unrest.

     While attending the inauguration of Ecuador's new President Lucio Gutierrez in the capital, Quito, Brazil's own newly anointed leader, Luiz Inacio Lula da Silva, stressed Venezuela's importance to the continent's largest country and economy.

     "We want Venezuela to find its way in the most tranquil and peaceful manner possible," said Lula. "What we really want is to help Venezuela find a way peacefully and for the Venezuelan people to be happy."

     While finding a peaceful end to the now 45-day strike may be a tall order, the Brazilian leader went to Quito on Wednesday with an agenda that included a brainstorming session with other Latin American leaders about how to end the strike.

     Lula brought with him the idea of creating a regional, multi-national "Friends of Venezuela Group" -- Grupo de Paises Amigos da Venezuela -- to help bring a peaceful end to the strike, as well as daily protests and clashes between supporters and detractors of Venezuelan President Hugo Chavez.

     A leftist with an inclination toward social reform, Lula has strong ties to Chavez, also from the left. Opponents of the Venezuelan president allege he has taken the nation too far to the left at the expense of the economy.

     Chavez -- who also attended the inauguration -- heaped praise on Lula for calling the meeting of president to help thrash out a solution to the strike.

     "It is extraordinary, because Lula and Brazil should assume, as they are already doing, the role of protagonists in leading the new South America," Chavez asserted.

     Not all Venezuelans shared their president's enthusiasm for Brazilian intervention in ending the strike. Protestors Tuesday gathered outside the Brazilian Embassy in the Venezuelan capital, Caracas, chanting and waving signs denouncing Brazil's intended role in their country's affairs.

     "We like samba -- we don't like intromission," read one sign, referring to the popular Brazilian dance.

     The Lula-led meeting of regional leaders has also drawn the ire of Washington, who had hoped to form its own "Friends of Venezuela" group to end strike that has severely handicapped Venezuela's oil production capabilities.

     A Washington Post article last week noted that the President Bush's administration was hoping to head off the left-leaning Lula government's initiative, adding that U.S. and foreign diplomatic sources were concerned that the effort would ultimately be counterproductive.

     The U.S.-led effort would include Brazil, as well as the United States, Mexico, Chile and possibly Spain, and a representative of U.N. Secretary-General Kofi Annan, according to the Post.

     U.S. State Department spokesman Richard Boucher recently explained the Bush administration's position on regional intervention in Venezuela, simply stating, "We don't think there needs to be some separate group of friends formed."

     Lula has maintained a non-adversarial, diplomatic position on the U.S. stance while moving ahead with the proposed meeting. His presidential spokesman, Andre Singer, said Tuesday that the Friends of Venezuela Group "would be to support the negotiation effort by Organization of American States Secretary-General Cesar Gaviria, to resolve the crisis in that country."

     Gaviria had been mediating talks between the government and opposition leaders in recent weeks with little success. The effort is currently at a standstill due to a disagreement regarding the possible ouster of Chavez. The OAS secretary-general also attended Wednesday's meeting of regional leaders.

     Singer said that Brazil's new Foreign Relations Minister Celso Amorim had spoken to U.S. Secretary of State Colin Powell about the upcoming meeting, though he didn't expand on the specifics of the leaders' discussion.

     "There is a convergence of opinion concerning the need to overcome the crisis in Venezuela," he said somewhat elusively.

     The Bush administration initially appeared apprehensive about interfering in the Venezuela crisis. Last spring, Washington came out in support of Chavez's ouster, only to have the Venezuelan president return to power a few days later.

     But now it appears the U.S. president is becomingly increasingly interested in ending a strike that has denied the United States the more than 1 million barrels of oil a day it was receiving from Venezuela.

     -0-      (Reported by Carmen Gentile, UPI Latin America correspondent,

www.voanews.com VOA News 16 Jan 2003, 00:18 UTC

Venezuelan President Hugo Chavez meets Thursday in New York with U.N. Secretary General Kofi Annan as six countries launch a joint effort to help end Venezuela's political crisis and crippling general strike.

Secretary-General Annan says he hopes all parties in Venezuela will use democratic and constitutional means to resolve their differences.

Meanwhile, Brazil, Chile, Mexico, Portugal, Spain and the United States have officially launched what they call the "Friends of Venezuela" group. Brazilian President Luiz Inacio Lula da Silva proposed the group. It will complement efforts by the Organization of American States to help Venezuela solve its problems.

President Chavez opposes U.S. participation in the Friends group unless President Bush personally takes part in its meetings.

A State Department spokesman, Richard Boucher, said Wednesday the United States has been and will continue to be very active with both the government and the opposition in seeking a political solution in Venezuela.

Venezuela is in the seventh week of a general strike that has shut down oil production, sending world oil prices climbing.

Opposition leaders have demanded that leftist President Chavez resign, saying his economic policies are destroying the country. Both sides are waiting for Venezuela's Supreme Court to decide the legality of a proposed February second referendum on whether Mr. Chavez should resign.

The government calls the referendum unconstitutional. The opposition hopes it could lead to early elections. Some observers say despite Mr. Chavez's widespread unpopularity, he would likely win re-election.

Some information for this report provided by AFP and Reuters.