www.gulf-news.com Manama |By Dr. Mohammed Al Asoomi | 26-01-2003

During the last few weeks the world's oil markets were influenced by many factors in play in opposite directions prompting Opec to intervene to curb rising crude prices and keeping them within the agreed range of $22-$28 per barrel.

Oil prices have been soaring since the end of the summer coinciding with the rising tensions caused by the American threats to wage war against Iraq.

However, action by Opec members who raised their production quotas contributed to curbing the price increase until the protests mounted against the elected President of Venezuela, hence reducing the country's oil exports and pushing oil prices to their highest levels in about 20 years.

Every time when oil prices rise or production levels fall, the Opec countries' oil ministers turn into glittering stars whose photographs and statements are carried by the world's newspapers, TV networks and other media.

Last week, the Opec ministers emerged with broad smiles after deciding to increase the Organisation's output by 1.5 million barrels daily to curb the soaring crude prices and to prevent any further rises, with Opec achieving a partial success in this regard.

Once again the saying that "Opec is a tea bag that only works in boiling water" is proved true. This means that Opec does not move except in crisis situations.

It should be noted that Opec usually succeeds in curbing the crude price increases but its intervention becomes less effective in the case of falling oil prices. In such event, it has to make great efforts to restore balance to the world's oil market by attempting to stop breaches and to cut output.

Owing to such moves dictated by the requirements and changes in the world's oil markets, rather than the strategies of oil producing and exporting countries, oil has lost a substantial part of its dominant share of the global balance of energy during the last two decades and such share is continuously being eroded.

I think that the two principal factors that contributed to crude price rise and linked to conditions of Venezuela and Iraq, both are Opec members, will soon cease to have any effect.

The Venezuelan oil production will return to normal during the next few weeks and the Iraqi situation is likely to be resolved during the first quarter of this year, as Iraq has a huge production capacity that will have a remarkable impact upon the supply and demand situation in the world markets.

While Opec's task last week was easy when the Organisation adopted a unanimous decision to make large output increases, its next task that will follow the resolution of the Iraqi issue will be much more difficult and complicated.

Once the Iraqi question is resolved, prices will start to fall. In addition, Iraq will resume production at its full available capacity to get the oil revenues that will enable it to overcome the economic consequences arising from its crisis with the U.S., and to rebuild its devastated economy.

Some of the other Opec members who quickly agreed at the recent meeting to raise oil output will be hesitant before showing any willingness to cut production once more to restore the required balance for the world's oil markets.

This often repeated picture of rises and falls in production and price levels take place from time to time in Opec, hence there is an obvious need for a business strategy that would enable it to avoid the sharp price falls arising from events beyond its control.

Such strategy should ensure for it reasons for success in building more diversified economies that are less dependent upon the exhaustible oil wealth since the modern sectors of information technology, communications and related service are capital intensive industries with such capital readily available to Opec members thanks to their enormous oil revenues.

The writer is a GCC-based economist.      

· UAE calls for dialogue at Davos forum · Young leaders scheme okays 365 projects · DI eyes Parekh project · Russia urges UAE to strengthen aviation ties · Al Fahim in logging joint venture · Sudatel, CBD get listing approval · Performance of Saudi banks good - Moody's · UAE external balance to remain in surplus · Opec needs strategy to avoid sharp price falls · Dodsal wins deals in Egypt, Oman · Arab banks target energy projects · Oman seeks $1b for refinery · Mideast refining, petrochem conference opens today · Sabic profit soars 60pc · Euro, franc dazzle as dollar weighed down by Iraq  

sf.indymedia.org by gg? / copytrastortranslation • Sunday January 26, 2003 at 02:37 AM

Another president to world-wide the social forum... - - The Ministry of Communication and Information of the Bolivarian Republic of Venezuela invites to the Press conference that will offer the President of the Bolivariana Republic of Venezuela Hugo Chávez Frias in the occasion of its visit the City of Porto Alegre, Brazil, Day January 26th, 2003, 5:00 p.m. How to be there if you are journalist -- uruguay.indymedia.org

Another president to world-wide the social forum...

The Ministry of Communication and Information of the Bolivarian Republic of Venezuela invites to the Press conference that will offer the President of the Bolivariana Republic of Venezuela Hugo Chávez Frias in the occasion of its visit the City of Porto Alegre, Brazil, Day January 26th, 2003, 5:00 p.m., in the Plenary room Joao Neves da Fontoura, (Planarinho) of the Legislative Assembly of this city, Located in Matrix's square.

Thanks to journalists who will cover this press conference, please confirm their attendance to electronic mail fperezs@telcel.net.ve or to telephones of Francisco Perez (051) 81157918 or to the 98060306 of Stella Valenzuela, before the 12:30 at noon of the January 26th 2003, if not will not be able to enter the room.

In order to guarantee a greater organization and due to the tight schedule that will fulfill President of venezuelan republic, questions will be by type of mass media, therefore the Agencies of the News, the Television, the Radio, the Written Press Local and the National, and the Alternative and Communitarian means will have to select two representatives to formulate their questions.

The Entrance of the Representatives from media to room will be between 3 p.m. and 4:50 p.m.

ORIGINAL SPANISH VERSION FROM URUGUAY INDYMEDIA

uruguay.indymedia.org

República Bolivariana de Venezuela y Hugo Chávez by gg • Saturday January 25, 2003 at 01:48 PM

Otro presidente al foro social mundial...

El Ministerio de Comunicación e Información de la República Bolivariana de enezuela invita a la Rueda de Prensa que ofrecerá el Señor Presidente de la República Bolivariana de Venezuela Hugo Chávez Frias con motivo de su visita la Ciudad de Porto Alegre, Brasil, el Día 26 de Enero de 2003, a las 5:00 pm en la sala Plenaria Joao Neves da Fontoura, (Planarinho) de la Asamblea Legislativa de esta ciudad, Ubicada en la Plaza da Matriz.

Se agradece a los periodistas que cubrirán esta rueda de prensa confirmar su asistencia al correo electrónico fperezs@telcel.net.ve o a los teléfonos de Francisco Pérez (051) 81157918 o al 98060306 de Stella Valenzuela, antes de las 12:30 de la tarde del 26 de enero de 2003, caso contrario no podrán ingresar a la sala.

Para garantizar una mayor organización y debido a la apretada agenda que cumplirá el Señor Presidente de la república se realizarán preguntas por tipo de medio de comunicación, así las Agencias de Noticias, la Televisión, la Radio, la Prensa Escrita Local y la Nacional, y los medios Alternativos y Comunitarios deberán seleccionar a dos representantes para formular sus preguntas.

El Ingreso de los Representantes de los medios a la sala será entre as 3 pm y las 4:50 pm

uruguay.indymedia.org/news/2003/01/9253.php

www.taipeitimes.com BLOOMBERG Sunday, Jan 26, 2003,Page 10

Crude oil rose for the first time in three days after White House spokesman Ari Fleischer said it was "unacceptable" for Iraq to bar scientists from talking with UN weapons inspectors.

Concern that the US will soon invade Iraq comes as a strike in Venezuela has caused that nation's exports to plummet. Iraq and Venezuela in November pumped about 7 percent of the world's oil.

Crude oil for March delivery rose US$1.03, or 3.2 percent, to US$33.28 a barrel on the New York Mercantile Exchange. It was the biggest one-day gain since Jan. 9. Prices were up 1 percent this week and 69 percent from a year ago.

In London, the March Brent crude-oil futures contract rose US$0.77, or 2.6 percent, to US$30.49 a barrel on the International Petroleum Exchange.

Hussein may try to blow up Iraq's 1,500 oil wells if the US and its allies invade, a senior defense official said at the Pentagon on condition of anonymity.

"There are a variety of intelligence sources that leave us with the impression or belief that the regime has the capability and intent to cause destruction to the oil fields," the official said.

During the 1991 Gulf War, Hussein ordered the destruction of more than 700 of 1,000 oil wells in Kuwait as his army retreated. It took 18 months and about US$20 billion to repair the damage.

The strike in Venezuela, which began on Dec. 2, is giving union officials, business leaders and former oil executives the chance to pressure President Hugo Chavez to step down or hold elections. Chavez has refused both alternatives.

As of Wednesday, Venezuela's production was about 714,000 barrels a day, striking oil workers said. The government says production is above 1 million barrels a day. Output has plunged from about 3 million barrels before the strike.

Venezuela, Saudi Arabia, Canada and Mexico normally vie to be the largest supplier to the US In October the four supplied 65 percent of US oil imports, according to the Energy Department.

Saudi Arabia, the world's biggest oil exporter, pumps about 10 percent of global supply.

www.washingtonpost.com Last Week Sunday, January 26, 2003; Page H02

It may be a month or two before the first shots are fired in Iraq, but for all intents and purposes the war has already begun on financial markets.

On Wall Street, stock price declines over the past two weeks have wiped out the gains built up earlier in the month on expectation of an economic rebound later in the year. On Friday, stocks took their steepest dive in four months, leaving the Dow Jones industrial average off more than 5 percent for the week. A steady stream of downbeat corporate earnings reports and forecasts prompted the sell-off, but most analysts blamed jitters about war for the market's downbeat mood.

Perhaps more ominous was the nine-day tumble of the dollar against the euro, with the dollar ending the week at a three-year low of $1.08 to the euro. That's down 1.4 percent for the week and 8 percent over the past two months. Shaken by what they see as President Bush's willingness to have the United States bear the full political and economic cost of a war to oust Saddam Hussein, some European investors have concluded that the dollar and dollar-denominated stocks and bonds may not be the safe havens in a time of geopolitical crisis that they are usually thought to be. Not surprisingly, the price of gold continued to climb, hitting $368 an ounce by week's end.

The challenge for the dollar is not that foreigners are selling their U.S. stocks and bonds en masse. It's that at a time when the United States has to attract more than $1 billion a day in foreign capital to sustain its record trade deficits, the dollar can fall even if Europeans and Asians simply slow the pace of their new U.S. investments.

The dollar's fall mirrors the steady increase in price of crude oil. The continued shut-off of supply from strike-ridden Venezuela and fears that another Gulf War could disrupt shipments from Iraq and other Middle Eastern countries combined to drive up the price in New York trading Friday by 3 percent, to $33.28 per barrel -- 69 percent higher than at this time a year ago. Economists say that when gross domestic product figures come out this week, higher energy prices will be one reason the numbers may show the economy has stopped growing.

Indeed, in a meeting last Monday with more than a dozen economists, President Bush acknowledged that because of the downdraft in consumer and business confidence caused by anxiety over war, the package of tax cuts he has proposed will have "little impact" on the economy or the stock market in the short term. He and his team are now pitching the plan as a stimulant to long-term growth.

www.nytimes.com By JUAN FORERO

CÚCUTA, Colombia, Jan. 21 — Jeremias Guerrero may not seem like a successful entrepreneur. He sleeps by the side of the road and awakens every morning at 3, covered in bug bites, to start the business of waving at passing cars with a rubber hose.

Drivers know that is the signal to stop and fill up from the five-gallon jugs of gasoline on Mr. Guerrero's makeshift stand. These days, with an eight-week strike crippling the oil industry in Venezuela, just a mile away across the border, gasoline dealers here are doing a steady trade.

By sunset, Mr. Guerrero, a 40-year-old father of two who has rarely held a steady job, counts up to $200 in earnings, half of that clear profit.

His customers pay nearly $2 a gallon — seven times the price at Venezuelan pumps before the strike started Dec. 2 — but are simply grateful that Mr. Guerrero and other dealers are willing to haul in the fuel from Colombia's interior.

"Thank God for Colombia," said Juan Pablo Rojas, 22, a university student from San Cristóbal, Venezuela, as he finished filling up the tank of his Dodge Dart and paid Mr. Guerrero before departing on a 90-minute journey home. "In my country, the lines at gas stations are 400 cars long, or 1,000, and you do not even know if they will still have gas after you wait."

Mr. Guerrero agreed. "If not for us, think of how Venezuelans would be suffering," he said.

But while those selling gasoline here celebrate, not everyone in Cúcuta (pronounced COO-coo-tah) is pleased.

This town of 800,000 was created for cross-border commerce, and has come to depend on increasingly affluent Venezuelans taking advantage of their stronger currency to cross the craggy canyons east of here to spend a day shopping.

While the sophisticates in the far-off Colombian capital of Bogotá would snicker that this was a backwater, Cúcuta in fact has a busy downtown with Miami-style fashion boutiques and elegant shoe stores catering to Venezuelans.

True, the Venezuelans also flocked to big Wal-Mart-like megastores on the city's outskirts to buy everything from appliances to mangos. But they also spent handsomely dining in the local restaurants and sleeping at city hotels, with the Caribbean lilt of Venezuelan Spanish becoming music to local ears.

Now, with business across the border hobbled and the currency plummeting in value, the flow of visitors has dried up.

"We live by the Venezuelans," explained Gerardo Raynaud, owner of a shoe factory and two outlet stores that have seen sales drop 40 percent. "We love them. When they do not come, we cry. Just imagine, 90 percent of my clients are Venezuelans."

Among the hardest hit are taxi drivers and trucking companies whipsawed by rising gasoline costs. Colombian coal produced in the outlying mountains is not being transported because the docks in Venezuela through which it is usually exported are shuttered.

"When you sum it all up, there are more losers than winners," said Alberto Santaella, president of the Chamber of Commerce. "Everything is down at least 40 percent — clothes, furniture, shoes. Today, those buyers have simply disappeared."

Downtown Cúcuta still appears normal — 10th and 11th Streets, chock full of boutiques, teem with passers-by.

But they are not Venezuelans, lamented Jorge Hernandez, a shoe store manager here, after a family of six walked in and out without so much as really browsing.

"Colombians," he explained, noting that December sales at the six outlets he manages dropped by half to $14,000 per store. "Those are our people. They do not buy. They do not have money."

Across the street, at Elegant World clothing, Pedro Arias waited listlessly for customers. Three employees stood motionless.

"You have to remember, Cúcuta just has too much commerce for its size," Mr. Arias said. "This was a city build for a frontier zone, and all the people who cross it."

The Venezuelan strike, which has closed businesses large and small across a country that is the world's fifth largest oil exporter, has fostered a cross-border trade in more basic goods than the hip-hugging jeans and other fashionable fare touted by Mr. Arias.

Marleny Peña helps her family run a small market just yards from the border, and is doing a brisk trade in soft drinks, beer, flour, beans, pasta and milk. Huge sacks of potatoes are piled in front of her store, and she has ordered 20 times as much Coca Cola and beer as the store normally stocks.

"We like to say this still feels like Christmas," she said with a laugh.