abcnews.go.com The Associated Press CARACAS, Venezuela Jan. 29 —

In Another Sign Venezuela Strike May Be Weaking, Private Banks Agree to Restore Normal Hours

President Hugo Chavez appeared to be winning the battle for control of Venezuela's oil industry, overcoming efforts by workers at the state oil company to strangle it with a 58-day-old strike.

In another sign the strike is weakening, private banks agreed Wednesday to restore normal banking hours next week, said Central Bank president Diego Luis Castellanos. Banks and many exchange houses had opened only three hours a day to support the strike.

The decision came after Chavez had threatened to fine banks, suspend their directors and withdraw military deposits from striking institutions.

Even as the government boosted oil production beyond the million-barrel benchmark, the work stoppage has had devastating effects on the country's recession-ridden economy.

Production reached 1 million barrels a day Tuesday one-third of pre-strike levels, according to striking executives at state oil monopoly Petroleos de Venezuela S.A. It had slipped as low as 200,000 barrels per day in December.

Output is rising because the government is focusing on newer oil fields, where crude is easier to extract. But the recovery should slow when the government is forced to reactivate old wells that have sat idle for nearly two months, making their crude sticky and difficult to pump.

"They are going for the lowest hanging fruit on the tree, the easiest to grab," said Ed Silliere, vice president of risk management at Energy Merchant LLC in New York. "In a few weeks, it is going to be a struggle."

Silliere said he expects difficulties to begin when output reaches 1.2 million to 1.4 million barrels per day.

In an effort to regain control of the oil monopoly, Chavez has sacked more than 5,000 of its 40,000 workers. State oil company executives warn the firings will make it even more difficult to reach full production capacity.

"That's what happens when unprepared personnel are put to work," Juan Fernandez, the leading spokesmen for dissident state oil workers, told a press conference.

Opposition leaders insist the strike will continue. But a public backlash over food, gasoline and medicine shortages has prompted some workers to consider easing the stoppage in certain areas.

Concerns about a public backlash over food, gasoline and medicine shortages has prompted some strike leaders to consider easing the stoppage in certain areas.

Shopping malls, restaurants and schools may reopen next week, at least part-time, said Julio Brazon, president of the Consecomercio business chamber. Some small businesses have reopened, and others never closed.

"The lifting of the strike is not being proposed now," said Carlos Ortega, president of the nation's largest labor union. "What is being proposed are some strategies that correspond to sectors involved in the strike." He did not elaborate.

Venezuelans must wait for hours in miles-long lines outside service stations. To ease the inconvenience, the government will impose limits on daily gas sales, said Luis Vierma, director of hydrocarbons at the Energy and Mines Ministry.

Although Chavez has had some success in reviving oil production, which provides half of Venezuela's government revenue and 70 percent of export earnings, he faces a daunting task in recuperating the country's economy.

Capital flight, stalled investment and strike damage led Santander Central Hispano investment bank to forecast a 40 percent contraction in the first quarter of 2003. Unemployment stands at 17 percent.

A freeze on foreign currency sales to protect the bolivar, which has lost 25 percent of its value this year, was extended Tuesday. The bolivar traded at 2,300 to the dollar Tuesday in secondary markets between private parties, bankers said. It was 1,853 to the dollar before the suspension started last week.

Limits on the amount of foreign currency Venezuelans can buy go into effect next week. The measure has been severely criticized by executives who say it could hurt businesses that depend on U.S. dollars to import goods.

"Chavez many have the initial advantage, but over the long term, he's going to have a much more difficult path," said Steve Johnson, senior policy analyst for Latin America at the Washington-based Heritage Foundation.

sg.biz.yahoo.com Wednesday January 29, 10:37 PM

CARACAS -(Dow Jones)- Venezuelan bankers decided Wednesday they'll return to opening the normal seven hours a day as of Monday, instead of the three hours a day they'd been keeping in support of a 59-day-old general strike, central bank president Diego Castellanos said.

The move follows media reports the government threatened to suspend directors of banks that ignored a decree requiring them to abandon the restricted hours.

Banking officials couldn't be reached for further comment.

ADVERTISEMENTLocal banks include Citi Group Inc.'s (C) Citibank and subsidiaries of Spanish conglomerates Banco Santander Central Hispano (STD) and Banco Bilbao Vizcaya Argentaria SA (BBV).

The bankers' decision follows those of many other businesses that have reopened after being closed for about eight weeks.

The strike that began Dec. 2 called for President Hugo Chavez to agree to early elections.

Chavez's term runs through early 2007.

Opposition leaders have said the strike isn't officially over but they appear to be relying more on international efforts to bring about early elections.

Chavez's critics blame his left-leaning policies for country's deepening economic crisis with a likely 8% contraction in 2002 amid 17% unemployment and 31% annualized inflation sparked by a 46% devaluation of the bolivar ($1=VEB1853).

Chavez has said the problems are due to an "economic coup" led by his opponents.

-By Jehan Senaratna, Dow Jones Newswires; 58212 564 1339; jehan.senaratna@dowjones.com

allafrica.com OPINION January 29, 2003 Posted to the web January 29, 2003 RW Johnson Johannesburg

THOSE who oppose the idea of an Anglo-American war against Saddam Hussein are wont to argue that "really it's just about oil". This view is not to be lightly dismissed, although the conclusion it leads to is less obvious.

When Saddam tried to annex Kuwait in 1991 there were two reasons why this aggression had to be resisted.

Firstly, it was a wholly unprovoked act of aggression; secondly, because if the Kuwaiti oilfields were added to Iraq's enormous oil reserves the world's second biggest Saddam would at once have been the overwhelming power within the Organisation of Petroleum Exporting Countries. The Saudis and the rest of the Gulf states would have had to pay him tribute, to avoid Kuwait's fate.

That power grab was extraordinary in its ambition, comparable only to Hitler's invasion of the USSR. Hitler knew that if he won, no power in the world could stand up to someone whose realm stretched from Brittany to Vladivostock.

We are all forever in the debt of the Red Army and the Russian people that they prevented mankind from being put at the mercy of a man who used the gaschamber as an instrument of policy.

But Saddam is exactly the same, right down to using gas against the Kurds and Iran. In Kuwait many of his fellow Arabs were put to tortures of mediaeval ferocity at his instruction. Personally, once I heard that when the Iraqi soccer team lost the players were routinely beaten and tortured.

I felt you could read off the rest. I won't read any more accounts of Saddam torturing children to get information out of their parents and so forth (he apparently plays a personal part in such sessions). It makes me sick, literally. The point is that the man is, provenly, a monster of Hitlerian proportions, in his methods and his ambitions.

US policy doubtless takes fully into account the imperative need to diversify its oil reliance. The US is in a vulnerable position when its oil imports come mainly from Saudi Arabia (home of Al-Qaeda), Angola (corrupt one-party regime) and Venezuela (when it's working).

Having Iraq under a friendly, democratic pro-western regime would clearly be in the US national interest. National interests not only exist but are legitimate and must be factored in. Let's not pretend. But I am from SA, not the US, whose national interest is not mine. I am far more concerned that Thabo Mbeki has chosen to flirt with Saddam, sent Aziz Pahad on a mission there and is clearly taking Saddam's side in the war.

Within months, let alone years, this could come to seem like the actions of Petain, Peron or Franco who had collaborated with Hitler. Once Hitler was beaten, Auschwitz and Belsen were revealed. There was no saving anyone who had sided with that. It will be the same with Saddam. SA is already backing the murderous and antidemocratic regime of Robert Mugabe. Truly, Mandela's legacy has been squandered.

What history remembers is that Hitler was so evil that for all one's detestation of Stalin's Russia we must all be eternally grateful to the Red Army.

Whatever one's reservations about Bush's US, we shall probably all feel exactly the same once Saddam has also been defeated and his murderous and utterly evil regime is laid bare.

When Iraqis are dancing in the streets at Saddam's fall and it will surely happen Bush and Blair, whatever their other motives, will seem like liberators.

Mbeki and Pahad will then be viewed not just by the US and Britain but by democratic Iraqis rather in the same light as Peron and Franco were viewed after 1945, men who had revealed their true colours by showing friendship to Hitler even while he was invading Russia and carrying out his terrible pogroms. Our leaders are playing with fire.

Johnson, former Oxford academic and former director of the Helen Suzman Foundation, is a freelance writer.

reuters.com Wed January 29, 2003 09:48 AM ET

ORLANDO, Fla. (Reuters) - Tupperware Corp TUP.N , direct marketer for household storage containers, said on Wednesday that profit fell as economic weakness in Latin America and Asia cut into sales.

Tupperware, known for its "Tupperware parties" at which sales representatives demonstrate products in people's homes, receives more than two-thirds of its sales outside the United States and has faced difficulty in Mexico, Venezuela, Korea and the Philippines.

At the same time, reported sales have been boosted by gains in the euro against the dollar.

The company, posted profit of $34.5 million, or 59 cents a share, compared with $28.5 million, or 48 cents a share, a year ago.

But earnings were only 50 cents a share in the quarter when profits from nonoperating items, like land development and the sale of a facility, are excluded, matching analysts' estimates posted on Thomson First Call.

Sales fell 2 percent to $321 million. Sales fell 54 percent to $21.5 in Latin American, where economic difficulties in Mexico and political turmoil and a general strike in Venezuela have weighed on results.

The company said it expects profit of $1.50 to $1.60 a share in 2003. The company had profit of $1.54 a share in 2002, but only $1.30 a share when nonoperating items are excluded. The company expects a 1 cent to 8 cents a share increase in earnings from operations, 6 cents from foreign currency and 13 cents to 18 cents from profits on land development.

Analysts forecast profit of $1.31 to $1.40 cents a share, excluding some unusual items, with an average of $1.38, according to market research firm Thomson First Call.

cbs.marketwatch.com FUTURES MOVERS By Myra P. Saefong, CBS.MarketWatch.com Last Update: 11:00 AM ET Jan. 29, 2003

NEW YORK (CBS.MW) -- Crude futures moved back toward $33 a barrel Wednesday as President George Bush's rationale for war against Iraq revitalized investor concerns over a disruption of oil supplies out of the Middle East.

Prices were higher despite only minor changes to U.S. crude supplies last week. The market was looking for a sizable decrease on the back of Venezuela's ongoing oil strike.

On the New York Mercantile Exchange, the March crude futures contract traded at $32.92 a barrel, up 25 cents.

Meanwhile, February gold traded near $370 an ounce. See Metals Stocks.

"If there were any doubters before last night, the situation become crystal clear," said Mike Cavanaugh, an analyst at Peak Trading Group in Chicago. Bush's State of the Union Address Tuesday evening "made it clear to the world that our intentions are to disarm Iraq." See speech highlights on CBS News.

Inventory data weren't quite as convincing. The Energy Department and American Petroleum Institute reported on minor changes to crude inventories during the week ended Jan. 24.

Inventories fell by 500,000-barrels, the Energy Department said, but the API posted a 232,000 barrel rise. Total crude inventories stand at 273 million barrels, according to both groups.

The results defied analysts' expectations for a sizable drawdown. Analysts at Fimat USA expected a decline of 4 million barrels in crude inventories.

Crude inventories are about 45 million barrels below their year-ago level and just above the minimum operational inventory level of 270 million barrels.

Crude imports were close to their level of last week, and it appears that some crude oil from Venezuela is still arriving in the U.S., according to Economy.com energy economist Thorsten Fischer.

Distillate inventories declined by 6.8 million to 122.4 million barrels in the latest week, the Energy Department reported. The API said supplies fell by 7.5 million to 123.1 million barrels.

Fimat was looking for a fall of 5 million barrels for distillates and a rise of 1 million barrels for gasoline.

"The tight crude inventories are cause for some concern, because they have an adverse effect on the production of refined products," said Fischer.

Following the news, petroleum-product prices traded higher. February unleaded gasoline rose by 1.88 cents to 94.6 cents a gallon. February heating oil traded at 95.1 cents a gallon, up 2.06 cents.

More support for oil

With Bush's strong case for war on Iraq and Secretary of State Colin Powell due to provide further incriminating evidence against Iraqi President Saddam Hussein to the UN Security Council on Feb. 5, "it is increasingly likely that an attack will be launched by mid-February," Fischer said.

And the strike in Venezuela will continue to be a supportive factor for oil, Fischer said.

While there is confirmation from both Venezuelan President Hugo Chavez and striking oil workers that production has surpassed 1 million barrels per day, about one third of normal production, "the pick-up in production is due to the fact that production has been focused on newer oilfields where crude oil is easier to extract," he said.

He pointed out that "additional increases in production that require extraction of crude from older fields will be much harder to come by" and "it will take a resolution of the general strike and considerable time and investment to restore crude oil production in Venezuela to pre-strike levels."

In other energy news Wednesday, natural gas for February was up 4.6 cents at $5.49 per million British thermal units. The March contract, which will become the lead-month at the session's close, was up 7.1 cents at $5.43 per million British thermal units.

Over in the equities arena, most oil service stocks traded lower. The Oil Service Index ($OSX: news, chart, profile) was down 0.3 percent.

The Reuters/CRB Index, a broad-based measure of the commodity futures market, traded at 245.9, up 0.5 percent amid strength in crude futures. Myra P. Saefong is a reporter for CBS.MarketWatch.com in San Francisco.