asia.reuters.com Mon January 27, 2003 01:08 PM ET By Patrick Markey

CARACAS, Venezuela (Reuters) - Venezuela's opposition Monday debated scaling back its strike against leftist President Hugo Chavez to ease the burden on a struggling private sector now also threatened by government currency curbs and price controls.

But two months into the grueling stoppage, there was no sign that rebel oil workers -- the backbone of the strike protest -- would end their disruption to crude oil production and shipments from the world's fifth largest petroleum exporter.

Some opposition leaders, who began the strike on Dec. 2 to force Chavez to call elections, said they may allow some shopping centers and food franchises to reopen as the long-running protest squeezes private businesses.

"People have held on for more than 50 days and made a great sacrifice," opposition leader Julio Borges told reporters. "Some people plan to reopen some commerce, industry and work activity. We must respect that as the strike is voluntary."

But there were clear divisions within the opposition ranks over strategy. Carlos Fernandez, a strike leader, said the protest would continue and played down comments by colleagues that it could be eased in some sectors.

"The only thing I can say is that the protest continues," Fernandez said.

The debate underscored the opposition's struggle to maintain momentum for their strike and left a question mark over the fate of thousands of striking workers at the state oil firm PDVSA, who may be left more isolated in their fight to oust the populist Chavez.

The shutdown has driven Venezuela's economy deeper into recession by choking off its lifeblood oil exports that account for half of government revenues. Severe gasoline shortages coupled with disruptions in food supplies have also fueled tensions in the oil-rich South American country.

Faced with the possibility of bankruptcy, many private businesses, restaurants and stores have already broken the strike and opened their doors. Commerce has been bustling in the center and west of Caracas for weeks although private banks are still only open for limited hours.

Chavez, who has fought back by firing 3,000 state oil workers and sending troops to oil installations, said Sunday he would introduce price controls and foreign exchange restrictions to counter the strike's economic impact.

The president, who was elected in 1998 and survived a coup in April, has vowed he will defeat the shutdown he portrays as an attempt by "terrorists" to topple his self-styled revolutionary government. He dismisses opposition calls for early elections.

Speaking in Porto Alegre, Brazil, Chavez said Sunday his government was studying putting a levy on speculative financial market transactions. The government last week suspended foreign exchange trading to shore up the battered bolivar currency and preserve its international reserves from capital flight.

The bolivar, which has tumbled more than 28 percent against the U.S. dollar since the start of the strike, lost 46 percent of its value last year as it was buffeted by investor jitters.

Opposition leaders say that Chavez is responsible for the sharp downturn in the nation's economy. Rather than helping the poor, they say, his corrupt and dictatorial rule has driven Venezuela into economic and political chaos.

Chavez's foes said the government's new control measures would only worsen the financial crisis and could be used to punish striking businesses by limiting their access to U.S. currency. "All these actions are going to bring severe consequences," Rafael Alfonzo, an opposition business leader told El Universal newspaper in an interview.

International attempts to broker an end to the stalemate have so far failed. Negotiations chaired by the Organization of American States are stalled over the timing of possible elections. Representatives from six nations, led by the United States and Brazil, will arrive Thursday in Caracas to lend weight to the OAS talks.

Both sides are studying proposals by former U.S. President and Nobel Peace Prize winner Jimmy Carter for either a constitutional reform that will shorten the president's term or a binding referendum on his rule in August -- halfway though Chavez's current term.

asia.reuters.com Mon January 27, 2003 01:08 PM ET By Patrick Markey

CARACAS, Venezuela (Reuters) - Venezuela's opposition Monday debated scaling back its strike against leftist President Hugo Chavez to ease the burden on a struggling private sector now also threatened by government currency curbs and price controls.

But two months into the grueling stoppage, there was no sign that rebel oil workers -- the backbone of the strike protest -- would end their disruption to crude oil production and shipments from the world's fifth largest petroleum exporter.

Some opposition leaders, who began the strike on Dec. 2 to force Chavez to call elections, said they may allow some shopping centers and food franchises to reopen as the long-running protest squeezes private businesses.

"People have held on for more than 50 days and made a great sacrifice," opposition leader Julio Borges told reporters. "Some people plan to reopen some commerce, industry and work activity. We must respect that as the strike is voluntary."

But there were clear divisions within the opposition ranks over strategy. Carlos Fernandez, a strike leader, said the protest would continue and played down comments by colleagues that it could be eased in some sectors.

"The only thing I can say is that the protest continues," Fernandez said.

The debate underscored the opposition's struggle to maintain momentum for their strike and left a question mark over the fate of thousands of striking workers at the state oil firm PDVSA, who may be left more isolated in their fight to oust the populist Chavez.

The shutdown has driven Venezuela's economy deeper into recession by choking off its lifeblood oil exports that account for half of government revenues. Severe gasoline shortages coupled with disruptions in food supplies have also fueled tensions in the oil-rich South American country.

Faced with the possibility of bankruptcy, many private businesses, restaurants and stores have already broken the strike and opened their doors. Commerce has been bustling in the center and west of Caracas for weeks although private banks are still only open for limited hours.

Chavez, who has fought back by firing 3,000 state oil workers and sending troops to oil installations, said Sunday he would introduce price controls and foreign exchange restrictions to counter the strike's economic impact.

The president, who was elected in 1998 and survived a coup in April, has vowed he will defeat the shutdown he portrays as an attempt by "terrorists" to topple his self-styled revolutionary government. He dismisses opposition calls for early elections.

Speaking in Porto Alegre, Brazil, Chavez said Sunday his government was studying putting a levy on speculative financial market transactions. The government last week suspended foreign exchange trading to shore up the battered bolivar currency and preserve its international reserves from capital flight.

The bolivar, which has tumbled more than 28 percent against the U.S. dollar since the start of the strike, lost 46 percent of its value last year as it was buffeted by investor jitters.

Opposition leaders say that Chavez is responsible for the sharp downturn in the nation's economy. Rather than helping the poor, they say, his corrupt and dictatorial rule has driven Venezuela into economic and political chaos.

Chavez's foes said the government's new control measures would only worsen the financial crisis and could be used to punish striking businesses by limiting their access to U.S. currency. "All these actions are going to bring severe consequences," Rafael Alfonzo, an opposition business leader told El Universal newspaper in an interview.

International attempts to broker an end to the stalemate have so far failed. Negotiations chaired by the Organization of American States are stalled over the timing of possible elections. Representatives from six nations, led by the United States and Brazil, will arrive Thursday in Caracas to lend weight to the OAS talks.

Both sides are studying proposals by former U.S. President and Nobel Peace Prize winner Jimmy Carter for either a constitutional reform that will shorten the president's term or a binding referendum on his rule in August -- halfway though Chavez's current term.

www.rochesterdandc.com By Joseph Spector Democrat and Chronicle

(January 27, 2003) — Sen. Charles Schumer renewed calls Monday for the Bush administration to consider using the federal government’s oil reserves to help Americans cope with the rising cost of gasoline and home heating oil.

Schumer said that Rochester already has seen a 34 percent increase in gasoline prices and a 23 percent spike in home heating oil costs from last year.

Releasing millions of gallons from the federal government’s Strategic Petroleum Reserve -- or even just threatening to do it -- would spur global oil producers to sell more on the open market and stop the increase in oil and gasoline prices, Schumer said as he stood in 2-degree weather near gas pumps at a Brighton gas station.

“Residents of Rochester are being socked with a quadruple whammy this winter: a soft economy, rising unemployment, higher gas and heating oil prices, and bitter weather conditions that threaten to make heating bills even higher,” Schumer said.

“Unfortunately, with the oil strike in Venezuela an continuing unrest in the Middle East, we might not see relief for these high oil prices unless something is done quickly.”

The reserve, a cache of some 600 million barrels of oil, was created in 1975 to help America respond to oil emergencies. Schumer argued that the Clinton administration helped check rising prices in 2000 by releasing 300 million barrels, and said Bush should do the same.

The average gas price in Rochester was $1.18 per gallon last year. On Monday, the average price was $1.58 per gallon, Schumer said. The average cost of residential heating oil was $1.44 per gallon last week, a 33-cent increase from last year, according to the Department of Energy.

E-mail address: jspector@DemocratandChronicle.com.

asia.reuters.com Mon January 27, 2003 12:34 PM ET By Richard Mably

LONDON (Reuters) - Oil prices fell on Monday as U.N. Secretary-General Kofi Annan called for more time for weapons inspectors to search Iraq before the United States makes a final decision on going to war.

U.S. light crude CLc1 slipped 93 cents to $32.25 a barrel and London Brent LCOc1 dipped 59 cents to $30.05 a barrel.

Chief U.N. weapons inspector Hans Blix on Monday delivered his first full report to the U.N. Security Council on Iraq's cooperation with arms inspectors.

He said: "Iraq appears not to have come to genuine acceptance, not even today, of the disarmament that was demanded of it."

Annan called for more time for the inspections which have been running since late November.

"If they need time, they should be given the time to do their work," Annan told reporters. Arms experts should be given a "reasonable amount of time," he added.

European and Middle Eastern allies are pushing the United States to allow the inspectors more time, possibly until March 1, officials and former policy makers told Reuters at the World Economic Forum in Davos, Switzerland. "What's driving the timetable for war is not diplomacy but military readiness," said Roger Diwan of consultancy PFC Energy in Washington.

"If the U.S. needs more time to get the military in place it will use that time to seek diplomatic backing but, whether it gets that or not, we still expect war to start some time between the middle of February and early March."

Blix said that documents Iraq submitted in a 12,000-page declaration had not answered questions on the whereabouts of the deadly VX nerve gas, two tons of nutrients or growth media for biological agents, such as anthrax, and 550 artillery shells filled with mustard gas and 6,500 chemical bombs.

And despite assurances from Iraq that it would encourage its scientists to submit to private interviews, no such talks have taken place and Baghdad had blocked the use of U-2 surveillance flights over all parts of Iraq.

At the same time the inspectors had not found evidence of banned activity or production facilities at any of the sites investigated that the United States says exist.

STATE OF THE UNION

Attention now will turn to President Bush's State of the Union address on Tuesday. Bush is then due to meet key ally Britain's Prime Minister Tony Blair later this week. Britain has sent thousands of troops to join a U.S. military build-up in the Gulf.

The world's biggest oil exporter Saudi Arabia, said at the weekend that it and fellow OPEC members were pumping sufficient volumes to prevent shortages.

Traders fear an attack on Iraq might coincide with the ongoing strike in Venezuela, which has cut exports from the world's fifth-biggest exporter.

"There is no shortage in the market and there should be no reason for prices where they are today," Saudi Oil Minister Ali al-Naimi told a panel at the World Economic Forum in Davos.

"We checked. We called. I checked with individual customers, refineries and others. I ask them one question: Do you feel you need more oil? And the answer is no," he said.

OPEC agreed two weeks ago to raise output by 1.5 million barrels per day to counter some of the shortfall caused by a nationwide strike in Venezuela.

Venezuela's President Hugo Chavez hinted at the weekend that he may be forced to take up arms if he were defeated by the opposition movement, which is calling for Chavez to step down.

Venezuelan crude output has recovered from lows in December and strikers said on Monday production was about 966,000 bpd, 29 percent of pre-strike levels. Chavez claims production has reached 1.32 million bpd.

ogj.pennnet.com   By OGJ editors HOUSTON, Jan. 27 -- Oil futures prices soared on New York and London markets Friday upon rising jitters between the US and Iraq about a possible war in Iraq and also upon lingering concerns about Venezuela's national strike as well as world oil supplies.

United Nations inspectors have searched Iraq for 2 months looking for evidence of banned weapons of mass destruction. Chief UN Weapons Inspector Hans Blix was scheduled Monday to present his findings to the UN Security Council.

Iraq was expected to be a main topic in the State of the Union address that US President George W. Bush will deliver Tuesday.

On Friday, a US military spokesman said that the military plans to quickly take control of Iraq's oil fields if war ensures, saying President Saddam Hussein plans to try to destroy his own country's oil wells just as he attempted to destroy Kuwait's oil wells in 1991.

A senior US defense official, speaking on condition of anonymity, told a Pentagon briefing that "intelligence sources" indicate that Saddam intends to target the oil fields. The official did not elaborate on the intelligence information.

Meanwhile, Qatari Energy and Industry Minister Abdullah bin Hamad Al Attiyah, current OPEC conference president, said the Organization of Petroleum Exporting Countries always has acted rationally to stabilize oil markets, OPEC News Agency reported.

"Despite all the problems that OPEC has faced, it has always managed to overcome them and helped restore a balance between supply and demand in order to maintain stability of oil prices in the international oil market," he told reporters Monday while attending a World Economic Forum in Switzerland.

The March contract for benchmark US light, sweet crudes soared by $1.03 to $33.28/bbl Friday on the New York Mercantile Exchange, while the April position gained 77¢ to $32.16/bbl. Heating oil for February delivery gained 3.49¢ to 95.02¢/gal. Unleaded gasoline for the same month rose 2.44¢ to 92.25¢/gal.

The February natural gas gained 6.6¢ to $5.52/Mcf Friday as cold weather covered most of the US east of the Rocky Mountains. Uncertainty regarding weather forecasts kept natural gas prices high last week, said analysts at Enerfax Daily. The February natural gas contract expires Wednesday.

In London, the March contract for North Sea Brent crude also rose sharply, gaining 77¢ to $30.49/bbl on the International Petroleum Exchange. The February natural gas contract climbed as well, up 11.65¢ to the equivalent of $3.07/Mcf on IPE.

The average price for OPEC's basket of seven benchmark crudes gained 38¢ Friday to $30.56/bbl.