www.forbes.com Reuters, 01.21.03, 5:08 PM ET

NEW YORK (Reuters) - Oil prices surged to 26-month highs on Tuesday as the prospect of war with Iraq loomed large with more U.S. troops heading to the Gulf region, while wheat futures rose as the U.S. Great Plains growing area remained dry.

In other commodity trading, cocoa futures were mixed as the industry kept a close watch on peace talks between rebels and the government in top grower Ivory Coast. Steep falls in the stock market and dollar lured safe-haven investors to gold.

NYMEX oil futures were again buoyed by war fears, which countered the bearish sentiment sparked by news that tanker pilots on a strategic export route in No. 5 petroleum exporter Venezuela had ended their part in a nation-wide labor strike.

Venezuela, which normally supplies about 13 percent of the crude oil imported by the United States, has seen its exports hobbled by the strike led by foes of President Hugo Chavez who want the leftist leader to step down and call fresh elections.

Fears of a war with Iraq, which could disrupt the flow of oil from the world's eighth largest oil exporter, took center stage in the market. President George W. Bush said Tuesday it was "clear to me now" that Iraqi President Saddam Hussein was failing to comply with U.S. demands to disarm.

"He's delaying. He's deceiving. He's playing hide and seek with inspectors," Bush told reporters at the White House.

"Time is running out," he said, as the Pentagon ordered two more U.S. aircraft carriers and another 37,000 combat troops to deploy to the Gulf region for a possible war with Iraq.

Oil traders said Bush's remarks appeared to leave little doubt that Washington was close to authorizing the use of military force against Iraq, accused by the U.S. of concealing weapons of mass destruction. Baghdad denies the charge.

Mohamed ElBaradei, head of the U.N. nuclear watchdog agency, said that "quite a few months" were needed to complete the search for any Iraqi weapons of mass destruction.

NYMEX February crude oil ended 70 cents higher at $34.61 per barrel after hitting $35.20. February gasoline was down 1.01 cents at 90.10 cents per gallon, while February heating oil was off 0.39 cent at 89.47 cents a gallon.

CBOT wheat futures were higher, supported by concerns of possible crop damage sparked by persistent dry weather in the Great Plains growing region.

"It's the weather -- that and it's been beat up pretty bad lately," a trader said, referring to recent sharp falls in wheat futures to 6-1/2 month lows on bearish official stocks data.

Part of the strength in CBOT soft red winter wheat came from strong gains in Minneapolis spring wheat futures.

Last Friday, trade sources said industry consultant Sparks Cos. forecast that farmers will sow 14.772 million acres with spring wheat this year in the United States, down from 15.714 million in 2002.

Traders and analysts said farmers saw better financial returns from other crops such as barley and soybeans.

CBOT March wheat ended 2-1/2 cents higher at $3.19-1/4 per bushel. March corn rose 1-1/4 cents to $2.33-3/4, while March soybeans finished unchanged at $5.56 per bushel.

CSCE cocoa futures were mixed, with industry selling capping gains. The market remained focused on peace talks between rebels and the Ivory Coast government in Paris.

The negotiations continued this week at trying to bring a resolution to a bloody war since a failed coup Sept. 19. U.N. Secretary-General Kofi Annan plans to attend the Paris summit, a U.N. spokesman said.

Even as the talks were progressing, Ivory Coast's army said it had repulsed an attack by Liberia a day after Liberia said it had been attacked by Ivory Coast.

Liberians have been fighting on both sides of the four-month war in Ivory Coast.

CSCE March cocoa ended $4 higher at $2,155 per tonne. COMEX gold futures were higher as U.S. equities and the dollar slumped, and amid Bush's tough talk on Iraq.

"Gold is going to react to any type of announcement that can impact the Iraqi situation. The comments from Bush today are certainly inflammatory," said Jim Pogoda, a trader at Mitsubishi International Corp. in New York.

Gold is about 25 percent higher than a year ago, making it one of the best-performing financial assets. Last week COMEX futures hit a six-year high.

The dollar fell to its weakest level in more than three years against the euro on Tuesday on the Iraqi tension. The dollar's dip made gold more affordable to overseas buyers.

COMEX February gold ended 70 cents higher at $357.5 an ounce.

www.forbes.com Reuters, 01.21.03, 5:08 PM ET

NEW YORK (Reuters) - Oil prices surged to 26-month highs on Tuesday as the prospect of war with Iraq loomed large with more U.S. troops heading to the Gulf region, while wheat futures rose as the U.S. Great Plains growing area remained dry.

In other commodity trading, cocoa futures were mixed as the industry kept a close watch on peace talks between rebels and the government in top grower Ivory Coast. Steep falls in the stock market and dollar lured safe-haven investors to gold.

NYMEX oil futures were again buoyed by war fears, which countered the bearish sentiment sparked by news that tanker pilots on a strategic export route in No. 5 petroleum exporter Venezuela had ended their part in a nation-wide labor strike.

Venezuela, which normally supplies about 13 percent of the crude oil imported by the United States, has seen its exports hobbled by the strike led by foes of President Hugo Chavez who want the leftist leader to step down and call fresh elections.

Fears of a war with Iraq, which could disrupt the flow of oil from the world's eighth largest oil exporter, took center stage in the market. President George W. Bush said Tuesday it was "clear to me now" that Iraqi President Saddam Hussein was failing to comply with U.S. demands to disarm.

"He's delaying. He's deceiving. He's playing hide and seek with inspectors," Bush told reporters at the White House.

"Time is running out," he said, as the Pentagon ordered two more U.S. aircraft carriers and another 37,000 combat troops to deploy to the Gulf region for a possible war with Iraq.

Oil traders said Bush's remarks appeared to leave little doubt that Washington was close to authorizing the use of military force against Iraq, accused by the U.S. of concealing weapons of mass destruction. Baghdad denies the charge.

Mohamed ElBaradei, head of the U.N. nuclear watchdog agency, said that "quite a few months" were needed to complete the search for any Iraqi weapons of mass destruction.

NYMEX February crude oil ended 70 cents higher at $34.61 per barrel after hitting $35.20. February gasoline was down 1.01 cents at 90.10 cents per gallon, while February heating oil was off 0.39 cent at 89.47 cents a gallon.

CBOT wheat futures were higher, supported by concerns of possible crop damage sparked by persistent dry weather in the Great Plains growing region.

"It's the weather -- that and it's been beat up pretty bad lately," a trader said, referring to recent sharp falls in wheat futures to 6-1/2 month lows on bearish official stocks data.

Part of the strength in CBOT soft red winter wheat came from strong gains in Minneapolis spring wheat futures.

Last Friday, trade sources said industry consultant Sparks Cos. forecast that farmers will sow 14.772 million acres with spring wheat this year in the United States, down from 15.714 million in 2002.

Traders and analysts said farmers saw better financial returns from other crops such as barley and soybeans.

CBOT March wheat ended 2-1/2 cents higher at $3.19-1/4 per bushel. March corn rose 1-1/4 cents to $2.33-3/4, while March soybeans finished unchanged at $5.56 per bushel.

CSCE cocoa futures were mixed, with industry selling capping gains. The market remained focused on peace talks between rebels and the Ivory Coast government in Paris.

The negotiations continued this week at trying to bring a resolution to a bloody war since a failed coup Sept. 19. U.N. Secretary-General Kofi Annan plans to attend the Paris summit, a U.N. spokesman said.

Even as the talks were progressing, Ivory Coast's army said it had repulsed an attack by Liberia a day after Liberia said it had been attacked by Ivory Coast.

Liberians have been fighting on both sides of the four-month war in Ivory Coast.

CSCE March cocoa ended $4 higher at $2,155 per tonne. COMEX gold futures were higher as U.S. equities and the dollar slumped, and amid Bush's tough talk on Iraq.

"Gold is going to react to any type of announcement that can impact the Iraqi situation. The comments from Bush today are certainly inflammatory," said Jim Pogoda, a trader at Mitsubishi International Corp. in New York.

Gold is about 25 percent higher than a year ago, making it one of the best-performing financial assets. Last week COMEX futures hit a six-year high.

The dollar fell to its weakest level in more than three years against the euro on Tuesday on the Iraqi tension. The dollar's dip made gold more affordable to overseas buyers.

COMEX February gold ended 70 cents higher at $357.5 an ounce.

www.dailyworld.com Posted on January 21, 2003 From The Associated Press

Petroleum prices rose today as a strike that has disabled the world's fifth-largest oil exporter entered its 51st day and international mediators struggled to resolve the stoppage aimed at forcing President Hugo Chavez from office.

European Brent crude soared to new two-year highs at more than $31 a barrel because of the Venezuelan crisis, possible war in Iraq and cold weather in the United States.

The Organization of Petroleum Exporting Countries said it will be difficult to make up for shortages of Venezuelan oil in the United States because many U.S. refineries are geared to process heavier Venezuelan crude.

The strike has slashed Venezuela's oil production by more than two-thirds and caused domestic shortages of gasoline, food and drinking water.

It has cost Venezuela $4 billion, according to the government, and contributed to the plummeting of the bolivar currency.

Former President Jimmy Carter was in Caracas trying to help resolve the situation. He was meeting with Chavez at the presidential palace early Tuesday.

Carter, who won the Nobel Peace Prize in October, attended negotiations between the government and opposition Monday and met separately with the president, strike leaders and Organization of American States secretary general Cesar Gaviria.

Carter's Atlanta-based Carter Center, the OAS and the United Nations are sponsoring the talks.

Business leaders, labor unions and opposition parties launched the strike Dec. 2 to demand that Chavez resign or call early elections.

Chavez threatened Sunday to walk out of talks, accusing the opposition of trying to topple him even as they negotiated.

Strike leader Carlos Ortega said Chavez would never accept a vote on his rule.

Ortega, president of the 1 million member Confederation of Venezuelan Workers, said Gaviria and Carter should "convince themselves once and for all that we are dealing with a regime that is not democratic, and that as long as Chavez stays in power there is no possibility of holding elections."

One man was killed and 27 were injured Monday when gunfire erupted as Chavez supporters confronted opposition marchers in Charallave, a town about 20 miles south of Caracas. At least six people have died in political violence since the strike began.

Six countries - Brazil, Chile, Mexico, Portugal, Spain and the United States - have begun an initiative called "Friends of Venezuela" to help end the crisis. Diplomats from the six nations will meet at OAS headquarters in Washington on Friday.

The National Elections Council, accepting an opposition petition, agreed to organize a Feb. 2 nonbinding referendum asking citizens whether Chavez should step down.

Chavez says the vote would be unconstitutional and his supporters have challenged it in the Supreme Court. But the president has welcomed a possible binding referendum halfway through his six-year-term, or August, as allowed by the constitution.

The 48-year-old Chavez was elected in 1998 and re-elected in 2000 on promises to redistribute the country's vast oil wealth among the poor majority.

His opponents accusing him of steering the economy into recession with leftist policies and running roughshod over democratic institutions.

www.quicken.com Tuesday, January 21, 2003 05:00 PM ET  Printer-friendly version   NEW YORK (Dow Jones)--The national average retail price of regular gasoline rose by 0.5 cent a gallon in the week ended Monday to $1.459, the highest price since Sept. 24, 2001, the Energy Information Administration said Tuesday.

Release of the weekly survey of 900 retail outlets was delayed by a day due to a holiday on Monday.

Prices were up 35.4 cents from a year earlier.

Prices were up for the sixth straight week, gaining 9.9 cents, or 7.3%, since Dec. 9. Crude oil and gasoline prices have gained in recent weeks on concerns over a continuing strike in Venezuela - the fourth-biggest oil supplier to the U.S. - and worries about the potential for a U.S. war with Iraq.

In the latest week, prices rose in all regions, except the Midwest where they were down slightly.

On the East Coast, gasoline prices rose by 0.2 cent to $1.462 and were 36.5 cents up from a year ago. That's the highest level since July 2, 2001.

Midwest prices slid 0.4 cent to $1.438, and were up 35.1 cents from a year earlier.

Gulf Coast prices were up 0.8 cent to $1.407 and were 35.8 cents higher than a year earlier. The price is the highest since June 25, 2001.

Rocky Mountains prices were up 0.1 cent at $1.414, and were 28.9 cents up from a year earlier.

West Coast prices were 3 cents higher at $1.548 and were 35 cents higher from a year earlier. That's the highest level since last July 15.

• By David Bird, Dow Jones Newswires; 1-201-938-4423; david.bird@dowjones.com

straitstimes.asia1.com.sg

OIL prices continued to track higher yesterday to levels not seen in more than two years as Britain announced it would strengthen its military forces in the Gulf in preparation for possible war in oil-exporting Iraq.

US light crude CLc1 climbed 15 US cents from last Friday's close to US$34.06 a barrel, the highest since December 2000.

The New York Mercantile Exchange was closed on Monday for Martin Luther King Jr Day.

Crude prices continue to gain strength from the ongoing strike in Venezuela and the looming threat of military action in the Middle East, which pumps about a quarter of the world's oil needs.

'The markets are still very edgy with both Venezuela and Iraq remaining the key issues against a backdrop of increasing demand and falling inventory,' said Sydney-based independent oil analyst Simon Games-Thomas.

'Prices appear destined to trade higher, given the current set of drivers and US$35 beckons inexorably in the short term,' he said.

Foes of Venezuelan President Hugo Chavez yesterday extended a nationwide strike into the 51st day, aiming to force the leftist leader to resign and call immediate election.

The strike has strangled oil supplies from the world's fifth-largest exporter, which accounts for about 13 per cent of petroleum imports into the United States.

As Britain prepared to send 30,000 troops and support staff to the Gulf region, chief United Nations (UN) weapons inspector Hans Blix said it was up to Iraq to convince the world it did not have any chemical, biological or nuclear weapons.

'The Iraqis have to create confidence in the world that they don't have weapons of mass destruction,' he said in Athens after a two-day visit in Baghdad.

'We don't say that they're guilty. We are not sure about it.

'There has not been enough evidence for us to report to the council that you can close the dossier. There remains questions to be answered.'

He will deliver a major report by weapons inspectors to the UN on Monday.

US Secretary of State Colin Powell, facing strong opposition in the Security Council against any war in Iraq, warned council members not to shirk responsibility when they meet next week to discuss the report.

'We cannot be shocked into impotence because we are afraid of the difficult choices that are ahead of us,' he said. --Reuters