sg.biz.yahoo.com Wednesday January 29, 11:57 PM By David Bird A Dow Jones Newswires Column

NEW YORK (Dow Jones)--In his State of the Union address Tuesday night, U.S. President George W. Bush flatly didn't declare war on Iraq.

ADVERTISEMENT But the message couldn't have been clearer if he had dressed as Groucho Marx, the leader of Freedonia in the movie "Duck Soup," rousing the troops in song: "In case you haven't heard before, I think they think we're going to war...We're going to war!"

The end of the State of the Union address is the start of a State of Higher Anxiety for oil markets, with the sole focus now the timeline for an assault on Iraq.

Crude oil futures prices, trading above $30 for the last 30 days on Nymex, face the real prospect of a spike or collapse in coming weeks - with a good probability of both. It's quite likely we'll have seen crude near $40 and near $20 by the end of March.

The pace of the march toward war grows faster each day. The next major milestone will be Feb. 5 when, Bush revealed last night, Secretary of State Colin Powell will address the United Nations Security Council, disclosing thus-far secret intelligence showing Iraq is hiding weapons of mass destruction from U.N. inspectors.

The next key date will be Feb. 14, with what we see as the last report of U.N. weapons inspectors to the Security Council before war.

There's little reason to expect Iraq will reverse its policy of obfuscation of inspectors by then, but Germany, which chairs the Council next month, has asked for a further report. The U.S. and the U.K. have signaled they don't have a problem waiting a few more weeks, as this will allow further deployment of troops and materiel to the region.

Oil traders have to figure out how they are going to trade at what will be a crucial - perhaps decisive - time. That's because the New York Mercantile Exchange,- the world's biggest oil market, will be shut when the drums of war, no doubt, will bang louder.

Nymex Holiday May Put Traders On Ice

Nymex is scheduled to shut early (1300 local time) on Friday, Feb. 14, ahead of the Presidents' Day holiday on Monday, when the market will be closed. After-hours Access trading won't begin until 1900 local time on Feb. 17.

While no one is giving clear timing for bombs over Baghdad, we continue to hear that a U.S. offensive could begin much sooner than indicated and with fewer troops in position than are anticipated by the middle, or the foreboding Ides, of March.

The rhetoric on Iraq will reach fever pitch in coming days. Bush will be joined in Washington later this week by his chief ally on Iraq, British Prime Minister Tony Blair. Blair's foreign secretary, Jack Straw, declares Iraq in "material breach" of U.N. ceasefire resolutions signed at the end of the 1991 Gulf War. Simply put, that means that if the ceasefire isn't valid, the war is still on.

Saddam's top aide, Tariq Aziz, also sounds as if he thinks the 1991 war is still on. Aziz pointedly warns that Kuwait could face attack again, if it serves as a launching post for a U.S. strike.

While that isn't exactly surprising, it's clearly causing ripples in the region and fears that Saddam may lash out in all directions when he feels he has no other option. Saddam is nothing but unpredictable - who foresaw the lighting of the Kuwaiti oil field fires? - but the most optimistic in the Gulf hope that he'll decide on exile once - and only when - the bombs start falling.

Our soundings from Saudi Arabia these days are tinged with more concern about managing a fierce fall in oil prices after a quick conflict, rather than trying to cap a spike. While that may be overly optimistic, the thinking is that although oil prices will skyrocket with word of the first U.S. missile launch, Saddam's forces, by and large, will crack like an eggshell and refuse to fight, as in 1991.

There will be an inevitable cutoff of oil supplies - perhaps throughout the Gulf region - just at the time the fighting begins, but shipments (except from Iraq) will quickly resume.

There's widespread anticipation that the U.S. and its partners in the International Energy Agency will release crude oil from emergency stockpiles to assuage supply fears. And, if 1991 is an indicator, that will be the beginning of the end for high crude prices.

First A Spike, Then A Glut

While the Saudis have pumped up supplies to about 9 million barrels a day, as expected, and there's talk of going higher, if needed, the real concern is on how to avoid a coming glut.

That puts focus squarely on the Organization of Petroleum Exporting Countries and its March 11 meeting.

After boosting output to cover lost supplies from Venezuela and build a cushion ahead of war with Iraq, OPEC will likely have to focus on the seasonal drop of more than 2 million b/d expected at the start of the second quarter.

We're reminded that although OPEC's basket price is averaging $30.31 so far this year - well above its $22-$28 target range - the always-conservative Saudi budget is pegged at a price of under $20. And that speaks volumes to the difficulty OPEC will face in trying to put a floor under prices.

While low U.S. oil inventories and the need for restocking may soften the impact of a price freefall, the season of heavy refinery maintenance is near, cutting real demand for crude, too.

Latest data show U.S. stocks still hover near critical levels, with Midwest crude stocks at their lowest-ever weekly level since government data collection began in 1990. Midwest stocks are a crucial indicator because the region houses the delivery point for crude against the Nymex futures contract.

Tight U.S. stocks will continue as a prop for high prices as the war scenario develops.

Venezuela Can't Find Its Customers

Venezuela remains a wild card for the market. As a widespread strike nears the start of its third month, crude output has crept up to 1 million b/d from about 400,000 b/d earlier this month, but is still at one-third of its November level.

The third-biggest producer within OPEC still faces huge hurdles in getting operations anywhere near normal. The extent of difficulties is clearly shown in pleading notices posted on the state oil company's oil trading Website, Pepex.

State oil company Petroleos de Venezuela reveals on the Website that striking workers sabotaged company records. They don't seem to know who their customers are or how to find them, now that they've got some oil to sell.

PDVSA is now essentially pleading with former customers to tell them "as soon as possible" who they are, how much oil they were buying and under what terms, and - if it's not too much of a problem - provide "copies of sales contracts."

As prospects for peace look worse in a roiling oil market, here's a simple verse as Valentine's Day nears:

Roses are red,

Violets are blue.

Bush is ready for war.

So, are you?

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

(David Bird is senior energy correspondent for Dow Jones Newswires.)

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reuters.com Wed January 29, 2003 11:18 AM ET By Patrick Markey

CARACAS, Venezuela (Reuters) - Venezuelan private banks decided Wednesday to restore normal working hours, opening another crack in a faltering eight-week-old opposition strike against President Hugo Chavez.

But striking oil workers were maintaining their shutdown, which has rattled global energy markets by slashing oil output in the world's No. 5 petroleum exporter.

Private banks, which make up nearly 90 percent of the Venezuelan financial sector, had been operating for limited daily hours since December in support of the strike launched on Dec. 2 to pressure leftist Chavez from office.

"The National Banking Council and the Venezuelan Banking Association decided at a meeting by a two-thirds vote to restart normal operating hours from Monday," association president Ignacio Salvatierra told reporters. The two associations represent most financial institutions.

As the strike nears the two month mark, backing for the protest in non-oil sectors has begun to fray as private businesses, restaurants and stores reopen to fend off bankruptcy.

Opposition leaders, who brand former paratrooper Chavez's rule as dictatorial and corrupt, offered on Tuesday to ease their strike by exempting food production and education.

But they say the protest will continue until Chavez accepts immediate elections. Chavez is due to step down at the start of 2007.

The shutdown has stoked tensions as it forced Venezuelans to line up for cash, dwindling supplies of gasoline and some basic foodstuffs. At least seven people have been killed in rival street protests and shootings since the strike began.

Bankers cited pressure from account holders for lifting the stoppage. "This is the result of demands from the public and deposit holders ... banks don't belong to their presidents but to their deposit holders," said Nelson Mezerhane, president of the Federal banking group.

The opposition strike has driven Venezuela's fragile economy deeper into recession and forced the government to suspend foreign currency trading while it prepares a fixed exchange rate to protect its reserves.

Battered by economic uncertainty, the local bolivar currency has plummeted more than 28 percent since the strike began. Venezuela's international reserves fell 7.3 percent to 11.05 billion as the Central Bank burned through as much as $60 million a day to shore up the currency.

Economists say exchange rate controls will help the government stem capital flight in the short-term. But restrictions could later squeeze the private sector and force the government to defend its fixed rate from black market exchange rates.

Chavez, who was elected in 1998 and survived a coup last year, has also dismissed opposition calls for him to resign. Though his popularity has fallen sharply this year, he maintains a solid base of support among poorer voters who believe his left-wing reforms are the key to a better life.

The Venezuelan leader, who led a botched coup himself six years before his ballot box victory, has fought back against the strikers by deploying troops and replacement crews to oil installations. But oil production still remains only at around a third of the usual 3.1 million barrels per day.

A fiery populist, whose rhetoric is filled with class warfare slogans, Chavez has also threatened to take over banks, schools and factories that joined the strike.

The international community will intensify its efforts to break Venezuela's political deadlock this week when representatives from six nations arrive in Caracas to lend their weight to peace talks. The negotiations chaired by the Organization of American States have so far failed to break their impasse.

Representatives from the six nations, led by the United States and Brazil, are scheduled to arrive on Thursday in Caracas. They will meet for talks Friday.

indymedia.ie Hands Off Venezuela Eyewitness Account by Chris Loughlin - sp Wed, Jan 29 2003, 3:36pm

interesting article i found on the web

Venezuela Opposition "strike" or bosses lock out? An eyewitness account If we were to believe the information we get from the mass media internationally, we would get the impression that in Venezuela there has been a general strike for the last one and a half months and that president Chavez is an extremely unpopular and authoritarian ruler who is about to be overthrown in a mass popular revolt. Nothing could be further from the truth.

In fact, the "national civic strike" called by the opposition on December 2, demanding Chavez's resignation and early elections has been a complete failure since the beginning. When I arrived in Caracas on December 11, the airport was working normally, as well as public transport (buses, coaches and the Caracas Metro), shopping centres, restaurants and bars. The basic industries (iron, steel, aluminium, etc), which are state-owned, were working at 100% capacity because of the decision of the workers and their unions to oppose the 'strike'.

In the state of Carabobo, one of the most important centres of manufacturing industry, the 'Class Struggle' and 'Democratic Trade Union Block', which brings together workers from 52 different unions in the most important factories in the state (including Ford, General Motors, Chrysler, Pirelli, Good Year, Firestone, MAVESA, and others) declared its opposition to the 'strike'. Some of these factories remained open but in others the workers went to work and found themselves locked out by the bosses. They demanded to be paid their wages, since they had gone to work, and in most cases they were paid. The same was true in some sections of the food and beverages industry, which is controlled, almost in its entirety by Grupo Polar, which is owned by the powerful businessman and opposition leader Mendoza.

This is not a strike at all, but a bosses' lock out. The fact that this protest has the support of the executive committee of the CTV, the main trade union federation in the country, should not fool anyone, since this Executive Committee has never actually been elected. The people who sit on it appointed themselves before the end of the ballot in the extremely irregular elections of November 2001. This explains why it is not recognised by most of the federations and local union branches.

The only part of the economy that was seriously hit by the opposition protest was the oil industry. Here, a small group of managers, directors, supervisors and technicians organised the sabotage of production and brought the industry almost to a halt. Oil production is highly computerised and a few managers withdrawing their keys and passwords can cause a lot of damage. They also made sure they fixed the administrative procedures so that they would still receive their (very high) salaries while they were on 'strike'. Also a number of captains and crew of some of the oil tankers mutinied and prevented normal deliveries. It is important to note that the oil workers' union leaders, who in April had supported the opposition-led attempted coup, this time did not even dare make a public statement in favour of the 'national strike'. Slowly but surely, oil workers took over the refineries and oil fields and started to get the industry back to normal. By January 10, the state-owned oil company PDVSA was working at 50% of capacity.

The opposition protest has been accompanied by a campaign of lies, half-truths and the blatant manipulation of all the private media, particularly the TV stations, which are also controlled by the opposition. All TV stations suspended their normal programming to broadcast only 'news' about the success of the 'strike' and gave all their commercial breaks over to opposition propaganda. To give just one example of the level of hysteria which the opposition and the media are trying to whip up against the government, when the government finally got a court order to take over the oil tankers that had mutinied, the opposition claimed that the new crews were Cuban, and that this was a further sign that the country was rapidly moving towards "Castro-Communism". This lie was repeated by the media, until a couple of days later, having been directly challenged by the Cuban Foreign Affairs Minister, the opposition leaders were forced to retract their allegations and admit that there were no Cubans working in the oil tankers.

At the beginning of January, the opposition, faced with the failure of their actions to bring the country to a halt, decided to up the stakes by announcing the closure of the banks and that schools and universities would not re-open after the Christmas break. Again, both actions failed. Most banks remained open and those that did close only did so for 48 hours. In most schools around the country the alliance of parents, teachers and students guaranteed the opening of the schools and colleges, in some cases against the will of the headmasters.

As for Chavez being an unpopular dictator, nothing could be further from the truth. The opposition has been regularly calling demonstrations against the government demanding his resignation, and they can manage to mobilise 100,000, 200,000 or even 300,000 people onto the streets, mainly from the rich and middle class areas of Caracas. What is not generally reported is that the Bolivarians, as the supporters of the revolutionary process call themselves, can get far bigger crowds onto the streets. On December 7, right at the beginning of the opposition protest, a massive demonstration of more than 2 million people took to the streets of Caracas against the 'strike' to defend the democratically elected government.

In fact, the result of the opposition 'strike' has been to further polarise society and to push many people who had not taken sides to openly declare themselves against the opposition, which they rightly see as being responsible for the fuel and food shortages. There have been many instances in which people, queuing for hours to get petrol, have expelled opposition supporters from the petrol station queues for having the audacity to try to blame the government for the shortages.

Chavez is most definitely not a dictator. It is in fact his supporters who are demanding that the government take stronger action against the opposition, which is hell bent on overthrowing a democratically elected government. The only people who are currently in prison as a result of the opposition coup on April 11 of last year are actually government supporters who were defending the presidential palace against the coup! Pedro Carmona, who appointed himself president for a few hours following the coup, was put under house arrest for a few days and later escaped to Colombia. The opposition newspapers (all of them apart from two or three exceptions) carry numerous articles and editorials openly calling for a military coup to remove Chavez and appealing to the armed forces to overthrow the government, and no measures are taken against them! There is a group of military officers who have declared themselves in rebellion against the government and instead of being arrested they have been allowed to set up a permanent camp in Plaza Francia, a square in the centre of Caracas (mind you, these "courageous" individuals leave their "permanent" camp at night to go to sleep in luxury hotels!).

Chavez and his government have been put to the test in seven different elections since he was elected in 1998 and they have won every single one of them. Furthermore, the country's new Bolivarian Constitution allows for all elected public officials to be subject to a recall referendum half-way through their term of office. This includes the president who is up for such a referendum in August 2003. The problem is that the opposition is convinced they would lose such a referendum and that is why they are demanding Chavez's resignation. What they did not achieve in April by means of a military coup, they want to achieve now by a combination of economic sabotage, chaos, appeals to the armed forces and international pressure.

The reason why the local oligarchy and US imperialism are opposed to Chavez is that even his limited programme of bourgeois democratic reforms (land reform, maintenance of PDVSA as a state-owned company and the extension of political democracy amongst others) and the process of mass mobilisation and organisation which they have generated, directly clash with the class interests of the capitalists. But the very actions of the reactionary forces are pushing the masses to take direct action and push forward their revolutionary cause. On January 10, for instance, 400 workers at COVENCAUCHO (a tyre company in the state of Lara) decided to take over the factory and declared themselves on "strike against the strike", when they were told that the company had decided to join the opposition protest. The oil workers in one of the oil refineries had been running the installations under workers' control throughout Christmas and New Year. When a new manager was appointed by the government to replace the old one who had joined the opposition protest, he was told by the workers that he was welcome to join them, but that the refinery was now under workers' management. Also, on January 17, the National Guard with the support of the workers and the local population took over a Panamco beverages warehouse in Carabobo belonging to the powerful businessman and oppositionist Cisneros, and the general in charge of this operation justified his actions by saying that collective rights came before private rights. All these are some indications of the deepening of the process of the Venezuelan revolution.

The main discussions that are taking place in the trade union and popular movement at the present time are about popular control of the mass media, workers' control and management of the state-owned companies, occupation of privately owned factories, popular management of schools, nationalisation of the banks, etc. Through their own experience, the workers, the poor peasants and the students are drawing the conclusion that the revolutionary process, in order to be defended, must be strengthened and deepened.

The most urgent task for revolutionaries in Venezuela is the building of a conscious Marxist leadership that can help the movement draw the necessary conclusions and that is that the revolutionary process must adopt a clear socialist and international approach as the only way to guarantee its final victory.

Jorge Martin

(secretary, Hands Off Venezuela Campaign,

add your comments

COMMENTS

The article is available on the web by Ray Wed, Jan 29 2003, 3:50pm

If you think its interesting, post a summary explaining why its interesting, and a link. Not the entire article.

related link: www.marxist.com/Latinam/venezuela_eyewitness0103.html

Ray Get A Life by CWIer Wed, Jan 29 2003, 5:36pm

Ever since you left the WSM you act like a petty dictator.

seattlepi.nwsource.com Wednesday, January 29, 2003 · Last updated 8:10 a.m. PT THE ASSOCIATED PRESS

HOUSTON -- ConocoPhillips on Wednesday swung to a fourth-quarter loss of $410 million, hindered by a $1.2 billion charge stemming from the disposition of service stations and the consolidation of refining and marketing operations between Conoco and Phillips Petroleum, whose merger was completed in August.

The loss of 60 cents per share at the nation's third-largest oil company compared with net income of $162 million, or 42 cents per share, reported by Phillips Petroleum Co. in October-December 2001.

The fourth quarter of 2002 produced the first results of ConocoPhillips as a combined company. The combined company, which completed the merger in August, compared results for the quarter to those of Phillips Petroleum in 2001. Results for 2002 included eight months of activity for Phillips and four months of activity for the combined company.

Excluding the one-time charge, the company said it earned $747 million, or $1.10 per share. On that basis, analysts surveyed by Thomson First Call expected ConocoPhillips to earn $1.11 per share.

Fourth quarter revenue was $23.6 billion, compared with $8.7 billion at Phillips in the year-ago period.

Net income for 2002 was $1.5 billion on revenue of $57.2 billion, compared with Phillips' $1.67 billion on $24.8 billion in revenue in 2001.

Jim Mulva, ConocoPhillips' president and chief executive officer, said daily petroleum production was in line with the company's target volume of 1.62 barrels-of-oil-equivalent even though production operations were shut down without incident in Venezuela because of an ongoing labor strike.

The company reduced its debt to $19.8 billion from $20.5 billion as planned.

Mulva also said first-quarter 2003 earnings likely will be down $50 million because of after-tax costs for planned maintenance at refineries, and the company could lose $30 million to $50 million per month as long as the shutdown of Venezuelan operations continues.

Shares of ConocoPhillips were up $1.29 cents to $47.20 in Wednesday morning trading on the New York Stock Exchange.

www.conocophillips.com

www.stripes.osd.mil By Terry Boyd, Stars and StripesEuropean edition, Wednesday, January 29, 2003

Terry Boyd / S&S

Rising gas prices "might slow down the travel" around Germany in the family’s Jeep SUV, said Sgt. Scott Crum of Headquarters, Headquarters Co., 40th Engineering Battalion, as he gassed up Tuesday.

Terry Boyd / S&S

A German ESSO truck driver hooks up the hoses, ready to pump tens of thousands of liters of gas into the Baumholder shoppette's underground tanks.

BAUMHOLDER, Germany — Gas prices at AAFES pumps are on the way up again.

All grades of fuel across Europe will cost an average of 7 cents more per gallon beginning Feb. 1, according to an Army and Air Force Exchange Service news release.

In Germany, where the majority of U.S. military personnel in Europe are based, unleaded gas will increase to $1.61 per gallon from $1.53. Super unleaded will rise to $1.70 per gallon from $1.63, and super-plus will go to $1.80 from $1.72. Diesel will rise to $1.64 per gallon from $1.57.

If interviews with about a dozen Baumholder drivers are any indication, few consumers will notice.

As she filled up her mini-van at Baumholder’s Shoppette on Tuesday, civilian Kathy Madison said, “To tell you truth, I’d don’t even look at the [gas] prices.”

The only effect he foresees is that 7 cents more per gallon “might slow down the travel” around Germany in the family’s Jeep sport utility vehicle, said Sgt. Scott Crum, Headquarters, Headquarters Co., 40th Engineering Battalion.

A number of factors are forcing prices up, including possible market disruptions due to war with Iraq. In addition, striking oil workers in Venezuela and continuing cold weather on America’s East Coast are tightening oil supplies, according to the Lundberg Survey Inc., the Camarillo, Calif.-based newsletter that tracks petroleum industry trends.

The average weighted price for gas stateside, including all grades and taxes, was about $1.52 per gallon Friday, up from $1.50 on Jan. 10, according to the Lundberg Survey of 8,000 stations nationwide.

While prices at AAFES pumps are higher than those stateside, they’re a bargain compared to filling up on the economy.

Germans pay about four times as much for gasoline — about 1.03 Euro per liter, or about $4.50 per gallon.

Whatever the price, consumers are going to ante up, said Pfc. Joseph Grooms, Service Battery, 4th Battalion, 27th Field Artillery. “It’s a necessity,” he said. “You have to have it!”