www.helenair.com by The Associated Press

NEW YORK (AP) - Crude oil futures fell sharply Monday, weighed down by growing calls for continued inspections of Iraq's suspected weapons of mass destruction and signs of a breakdown in the strike in Venezuela.

On the New York Mercantile Exchange, nearby March crude oil dropped 99 cents to close at $32.29 a barrel, surrendering most of Friday's gains.

February heating oil shed 1.59 cent to close at 93.43 cents a gallon, while February gasoline was off 2.10 cents at 90.15 cents a gallon.

On London's International Petroleum Exchange, March crude fell 63 cents to close at $29.86 a barrel.

"I think the market is not looking for a Groundhog Day launch date," Tim Evans, an energy analyst at IFR Pegasus, said of a possible attack on Iraq. "I think the background concern is there, but the market is indicating a release of tensions regarding an attack on Iraq."

That release of tensions deepened as Chief U.N. weapons inspector Hans Blix delivered a mixed report to the Security Council that failed to provide an automatic trigger for action against Iraq, as many had speculated.

Blix said that while Iraq wasn't fully complying with disarmament demands, it was providing access to his team of inspectors now working in the country. On the question of how long inspectors need, Blix said he shared "the sense of urgency" to verify disarmament within "a reasonable period of time."

He didn't request more time, but Mohamed ElBaradei, the head of the U.N. nuclear agency, said the weapons search needed an extra few months.

Secretary of State Colin Powell said the inspectors' conclusion wasn't surprising and added that time is running out for Iraq. "We cannot allow the process of inspections to string us out forever," Powell said.

The State Department has reportedly begun drafting a second resolution calling for authorizing force against Iraq, Cable News Network reported.

But Powell said America will decide on the next step once he consults other members of the Security Council and President Bush has conferred with foreign leaders.

Nevertheless, there was a chorus of calls that inspectors should be given more time to complete their work. The calls came from Russia and China as well as traditional U.S. allies France, Germany and Canada.

"There wasn't enough to make the U.S. change its position, and there wasn't enough new information to make France or Russia or China or Germany or the rest of the world change their view of the situation," Evans said.

The oil market had anticipated that a U.S. attack could come as soon as early- to mid-February, said Tom Bentz, an analyst at BNP Paribas Futures in New York. But with growing calls for more inspections, that may be several weeks away, Bentz added. "It doesn't look like anything is going to happen immediately," Bentz said. "It's going to take time."

Meanwhile in Venezuela, there were signs that the general strike is crumbling, allowing oil production to recover from a sharp slump in December and January.

Output has risen to about 1 million barrels a day, according to dissident workers at state-owned Petroleos de Venezuela SA. A PdVSA spokesman said about 90 percent of workers at PdVSA have returned to work.

Before the strike, Venezuela produced about 3 million barrels a day of oil, sending about 2.5 million barrels a day to world markets, including 1.5 million barrels a day to the United States.

"It's going to take a while to get exports back to full capacity, but there are signs that the worst is behind us," said Ed Silliere, an analyst at Energy Merchant in New York.

www.menewsline.com

WASHINGTON [MENL] -- The United States has relayed a warning to its embassies around the world to prepare for immediate evacuation.

The State Department told U.S. embassies that they should warn Americans living abroad to prepare for immediate evacuation in case of an attack or some other emergency. The department warned Americans abroad to prepare up-to-date documents and medicines so they can quickly leave for home.

The department asked all consulates and embassies worldwide to send a warden's message to local American communities with advice on preparedness for an emergency. The message would warn of such emergencies as political or economic unrest, natural disaster or a terrorist attack.

The department has intervened in helping American citizens escape from several hot spots around the world over the last year. They included Cote D'Ivoire, the Central African Republic, Indonesia, Israel and Venezuela.

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news.bbc.co.uk Tuesday, 28 January, 2003, 07:00 GMT

Venezuela's general strike has led to a drop in oil production

Oil prices fell in New York on Monday as UN secretary general Kofi Annan asked for more time for UN weapons inspectors to finish their job in Iraq.

In New York, crude oil prices fell 3% after UN chief weapons inspector Hans Blix offered little evidence that Iraq was hiding banned weapons.

March contracts for light sweet crude, the US standard, closed 99 cents lower at $32.29 a barrel, down about $3 from the 26-month high of $35.20 reached last week on fears a war with Iraq was imminent.

But in electronic trade on Tuesday, light sweet crude gained over 1%, up to $33.66 a barrel after a media report that the US was ready to attack Iraq in February.

I think the market is not looking for a Groundhog Day launch date

Tim Evans, energy analyst at IFR Pegasus

In London on Monday, March Brent crude oil fell 63 cents at $29.86.

Groundhog Day

Global stock markets reacted to Mr Blix' speech with sharp downfalls on Monday, but the oil market seemed to be taking a different view on the impact of his findings.

"I think the market is not looking for a Groundhog Day launch date", said Tim Evans, an energy analyst at IFR Pegasus.

"I think the background concern is there, but the market is indicating a release of tensions regarding an attack on Iraq."

Venezuela

Apart from Mr Blix' speech, news that a crippling 57-day-old strike in Venezuela, the world's fifth largest petroleum exporter, could ease also weighed on oil prices.

On Monday, opposition leaders said schools, restaurants and malls may reopen but the strike in the oil industry would go on in spite of efforts to restart production.

The strike has led to a sharp drop in Venezuelan oil production in December and January.

"It's going to take a while to get exports back to full capacity, but there are signs that the worst is behind us", said Ed Silliere, an analyst at Energy Merchant in New York.

Hans Blix

Hans Blix reported to the UN Security Council on Monday after two months of inspections.

He said there were gaps in information that Iraq should have delivered by now, although he could not conclude Baghdad possessed prohibited weapons.

Oil prices are still up almost a third from mid-November on concerns that hostilities in Iraq could upset oil supplies from the Middle East while production in Venezuela is crippled.

An icy Arctic wind sweeping across the eastern United States over the past two weeks has also boosted prices by lifting heating demand.

biz.thestar.com.my

PRICES of plastic resins, both local and imported, have increased substantially between 15% and 30% in late January this year compared with November 2002. 

The increase was in line with the surge in the crude oil price, which had surpassed US$30 per barrel, the Malaysian Plastics Manufacturers Association (MPMA) said in a statement. 

MPMA said that this prevailing trend was expected to continue into February/March 2003 due to the increasing threat of the Iraqi war and the oil-strike in Venezuela, which would not likely end by next month. 

“Because of this increase in the prices of plastic resins, there would be a spill-over effect, which leads to the increase in the cost of production,” it said. 

MPMA president Callum Chen said that the association had asked that retailers of plastic finished products exercise some understanding and consideration in their negotiations with the plastic products manufacturers so as not to have too big an impact on the end-users. 

Currently MPMA has 900 members, which represent about 60% of plastics manufacturers in the country and accounts for 80% of the country’s total production of plastic products. – Bernama 

www.forbes.com Reuters, 01.27.03, 6:53 PM ET

CARACAS, Venezuela, Jan 27 (Reuters) - Venezuela's government, fighting a crippling opposition strike, will extend a suspension of foreign exchange trading for at least this week as the government finishes drawing up and implementing currency controls, government sources said Monday.

President Hugo Chavez's government, whose vital oil income has been slashed by the 57-day strike, last week suspended currency trading for five market days prior to introducing foreign exchange curbs. The government said the measure was intended to halt the slide of the bolivar and slow capital flight.

"The market will remain closed at least for all of this week because the implementation of currency control measures is very slow," one government source, who asked not to be identified, told Reuters.

Another source said the government was studying various proposals on how to implement the measures. Officials were speaking with banks on what exchange rate would work under the new controls. The currency trading suspension could last until next Tuesday, Feb. 4, one of the sources said.

The opposition strike, started on Dec. 2 to force Chavez to resign and call elections, has driven Venezuela's economy deeper into recession and sent the bolivar tumbling against the U.S. dollar.