new.stockwatch.com 2003-01-30 05:30 - News Release

HOUSTON, Jan. 30 /PRNewswire-FirstCall/ -- Lyondell Chemical Company today announced a net loss for the fourth quarter of $93 million, or $0.58 per share. This compares to a net loss of $53 million, or $0.46 per share, for the fourth quarter of 2001, and a net loss of $2 million, or $0.02 per share, for the third quarter 2002.

For the full year 2002, Lyondell had a net loss of $148 million, or $1.10 per share, compared to a net loss of $150 million, or $1.28 per share, for 2001.

abcnews.go.com — By Nigel Stephenson

LONDON (Reuters) - Stocks and the dollar rose on Thursday as Washington prepared to launch a last diplomatic push to persuade Iraq to disarm and the Federal Reserve sought to soothe nerves over the U.S. economy.

Safe haven gold and government debt prices eased after U.S. officials heralded an uptick in the diplomatic tempo ahead of Secretary of State Colin Powell's February 5 presentation to the Security Council of intelligence on Iraq's alleged arms programs.

U.S. stocks looked set to open flat but world crude prices stayed strong as the oil market brushed off the U.S. diplomatic initiative as unlikely to avert conflict.

The dollar edged off three year lows after the Fed left interest rates unchanged at a four-decade low on Wednesday and said the U.S. economy should pick up as war fears lift.

Some traders cited a letter of solidarity with the Bush administration, signed by eight European prime ministers and published in several newspapers, as contributing to the more positive mood.

"People were looking for an excuse to buy and this (the allies' support) represents a moderate improvement for the U.S.," said Paul Meggyesi, currency analyst at JP Morgan.

The euro was last trading around $1.0745, up 0.8 percent from its New York close. The greenback hit a three-year low beyond $1.09 on Monday. The U.S. currency was up nearly half a percent on the yen at 118.94.

European stocks rose, led by gains in insurers, and U.S. futures indicated Wall Street was set to open modestly higher.

"The fear and uncertainty over a possible conflict will soon be over," said Roger Hornett, chief executive and global strategist at Gilissen Securities.

The FTSE Eurotop 300 index <.FTEU3> of pan-European blue chips was up 1.97 percent while the narrower DJ Euro STOXX 50 <.STOXX50E> index was up 1.77 percent, off the day's highs.

Insurers bounced from a four-month low hit on Wednesday on worries over the impact of tumbling share prices.

However, some money managers cautioned the downward trend, which saw nine consecutive days of losses, was still intact.

"Last week we had huge declines in equity markets and therefore some upward correction is inevitable, but we asset managers take a more medium-term view and we continue to underweight equities," said Joerg Kraemer, a strategist at Invesco Asset Management in Frankfurt.

U.S. SHARES SEEN FLAT

U.S. shares, which rallied on Wednesday after the Fed's decision, were expected to open flat.

Markets were also looking to U.S. fourth-quarter growth data due at 1330 GMT for more clues to the state of the economy. Economists forecast a subdued 0.7 percent annual growth rate after 4.0 percent in the previous three months.

Tokyo shares closed lower as institutions, spooked by the threat of war, sold blue chips. The Nikkei <.N225> ended down 0.17 percent, just above a two-decade low hit last November. The broader TOPIX <.TOPX> index dipped 0.07 percent.

Oil prices held firm. Brent crude for March delivery was down eight cents at $30.94 a barrel. U.S. light crude , which rose three percent on Wednesday on a big drop in U.S. winter heating oil stocks, was down six cents at $33.57 a barrel.

"Washington says that the current flurry of international diplomatic activity is a window of opportunity to avert war. We see it as an attempt to build an international coalition to back the U.S. position and that war is inevitable," said Lawrence Eagles at GNI-Man Financial.

The threat of war in the Gulf, which supplies 40 percent of world crude exports, and a strike in Venezuela, have pushed up prices 35 percent since late November.

Safe-haven government bond prices fell. The yield on the two-year German Schatz <EU2YT=RR>, which moves in the opposite direction to the price, was up 1.6 basis points at 2.62 percent. It touched a 3-1/2 year low of 2.54 percent last week. The 10-year Bund <EU10YT=RR> was yielding 4.09 percent, up 3.4 basis points.

www.forbes.com Reuters, 01.30.03, 8:30 AM ET OTTAWA, Jan 30 (Reuters) - Statistics Canada issued the following data on Thursday:

Industrial product and raw materials price indexes December 2002

Manufacturers' prices, as measured by the Industrial Product Price Index (IPPI), fell in December (-0.4%) for the second month in a row. However, the IPPI remained high and prices were up 2.8% from December 2001, the highest year-over-year increase since May 2001. This rise reflects a much stronger performance in the second half of 2002 than in the same period of 2001.

On a monthly basis, lower prices for motor vehicles and other transport equipment (-1.0%), pulp and paper products (-1.1%), chemical products (-0.6%) and electrical and communications products (-0.6%) had a major impact. Higher prices for meat, fish and dairy products (+1.2%) and for fruit, vegetable and feed products (+0.3%) partly offset these monthly decreases.

Strong contributors to the year-over-year growth were petroleum and coal products (+24.5%) and primary metal products (+8.4%). Fruit, vegetable and feed products (+5.5%) and chemical products (+3.5%) also contributed to the annual growth in manufacturers' prices. However, lower prices for pulp and paper products (-2.5%) and for lumber and other wood products (-1.3%) dampened the increase.

From December 2001 to December 2002, petroleum and coal product prices rose 24.5%, the largest increase since December 2000. If petroleum and coal product prices had been excluded, the year-over-year increase would have been 1.6% instead of 2.8%.

Note to readers

The Industrial Product Price Index (IPPI) reflects the prices that producers in Canada receive as the goods leave the plant gate. It does not reflect what the consumer pays. Unlike the Consumer Price Index, the IPPI excludes indirect taxes and all the costs that occur between the time a good leaves the plant and the time the final user takes possession of it, including the transportation, wholesale, and retail costs.

Canadian producers export many goods. They often quote their prices in foreign currencies, particularly for motor vehicles, pulp, paper, and wood products. Therefore, a rise or fall in the value of the Canadian dollar against its US counterpart affects the IPPI.

The Raw Materials Price Index (RMPI) reflects the prices paid by Canadian manufacturers for key raw materials. Many of these prices are set in a world market. Unlike the IPPI, the RMPI includes goods not produced in Canada.

Manufacturers paid 17.6% more for their raw materials than they did in December 2001, after an 11.6% increase in November. Higher prices for mineral fuels and vegetable products, as well as for wood products and non-ferrous metals, were mainly responsible for this annual rise in the Raw Materials Price Index (RMPI). If mineral fuels had been excluded, the RMPI would have increased 7.8%.

On a monthly basis, raw materials prices were up 4.2% from November. Mineral fuels were responsible for most of the monthly rise. Prices for animal products were also higher in December than in November. Lower prices for vegetable products, non-ferrous metals and ferrous materials partly offset this monthly increase.

The IPPI (1997=100) stood at 108.2 in December, down from its revised level of 108.6 in November. The RMPI (1997=100) rose to 118.4 in December from its revised level of 113.6 in November. Monthly crude oil prices are up but prices for lumber products are unchanged

In the RMPI, crude oil prices were 12.8% higher in December than in November, mainly the result of lower inventories and strike activity in Venezuela. On a year-over-year basis, crude oil prices were up by 53.3%.

In the IPPI, lumber and other wood product prices were unchanged in December from November. Higher prices for softwood lumber were offset by lower prices for veneer and plywood. On a year-over-year basis, lumber and other wood products were down 1.3%. Impact of exchange rate pushes prices down

From November to December, the value of the US dollar weakened against the Canadian dollar, pushing down prices of commodities that are quoted in US dollars. As a result, the total IPPI excluding the effect of the exchange rate would have remained unchanged instead of declining 0.4%.

On a 12-month basis, the influence of the dollar had no impact. The IPPI excluding the effect of the exchange rate would have remained at an increase of 2.8% from December 2001 to December 2002. Finished goods continue to increase from a year ago

Rising prices for petroleum products, tobacco products, fruit, vegetable and feed products, meat, fish and dairy products, and electrical and communications products pushed prices for finished goods up 1.9% from December 2001. These increases were partly offset by lower prices for pulp and paper products and motor vehicles.

On a monthly basis, prices for finished goods were down 0.5% from November. Lower prices for motor vehicles, petroleum products and electrical and communication products were partly offset by higher prices for meat, fish and dairy products.

"Finished goods" are those generally purchased for the purpose of either consumption or investment. Most of the foods and feeds category ends up in the hands of consumers. Most capital goods are equipment and machinery generally bought by companies, government agencies or governments. Much of the remainder is bought by consumers.

allafrica.com Onyebuchi Ezigbo Abuja

Chairman, House of Representatives Committee on Petroleum Matters, Hon. John Agoda, has called on the Federal Government to use the additional oil revenue expected from this year's budget to fund developmental projects in the country.

The current price of crude oil hovers around $32 per barrel, about $10 above the $22 pprojected in the 2003 budget. Nigeria Competition Bill

The rise in crude oil prices is the result of the threat of war in the Gulf Region and the oil price workers' strike in Venezuela.

The price of oil has continued to soar despite Organisation of Petroleum Exporting Countries (OPEC) recent increase of quota.

Speaking with THISDAY yesterday in Abuja, Agoda said there were a number of development projects earmarked for execution by the Federal Government, which if effectively carried out, will positively impact on the lives of the generality of Nigerians.

He listed such priority areas as education, employment-generating projects, and the general elections etc.

"We have various development projects going on in the country, starting from the economy, the educational sector and with the general elections coming up this year, we need re-education and adequate enlightenment of our people and we need to create more employment", Agoda stressed.

Last year, Nigeria's development aspirations suffered severe setback due to the disruptive effects of the fluctuation of oil revenue profile.

hartfordadvocate.com by Chris Harris - January 30, 2003

It pays to shop around, one AAA spokesman says. but legislators and the AG want zone pricing to stop.Thanks to America's oil shortage scare, propelled by curtailed oil and gas exports from Venezuela and the impending threat of a battle royale in Saddam country, gasoline prices are rising, and fast. Within the last month, Connecticut motorists have been shelling out more and more dough at the pumps -- well, some motorists maybe more than others.

Petrol prices are up, and there are no signs they'll be slowing, says Fran Mayko, an American Automobile Association spokeswoman.

According to the latest figures from AAA's daily fuel gauge, the national average has jumped almost 10 cents a gallon within the last month -- up from $1.37 to $1.47 a gallon.

Connecticut's average price is $1.59 a gallon, up from $1.55 a little more than a month ago, and $1.20 a year ago. The average price in the Hartford area was $1.58 last week. In Norwich, it was $1.53, while in the Bridgeport region, gas was priced at $1.62 a gallon.

Gasoline prices obviously fluctuate exponentially with the ebb and flow of the crude-oil market tide. But some Connecticut automobile owners are still going to end up paying more than others -- regardless of what happens, if anything, in Iraq.

Basically, market insiders tell the Advocate, it comes down to where you're living -- in essence, regional factors, based on demographics, dictate who pays what to fill 'er up, even during times of market stability.

It's a practice known as zone pricing -- a price-setting strategy used by the corporate brands to "better compete." At least that's the public spin. Zone pricing is commonplace in both affluent areas and low-income areas throughout the country and state.

The rich industry watchdogs, for instance, are targeted, as they're usually more willing to pay higher prices. Meanwhile, customers in more distressed communities are also marked for inflated prices because they're usually more isolated and less able to shop around.

Local examples of zone pricing are abundant. Last week, for instance, the Advocate passed through Avon, stopping at several service stations along the way; we found that the going rate for regular unleaded self-serve gasoline was, on average, $1.67 a gallon. On Albany Avenue in Hartford, the average rate was $1.66. In Tolland and East Hartford, not affluent nor indigent areas by any means, the average rate was $1.55.

Harry Murphy, a spokesman from the Service Station Dealers of America, a national association of service station dealers, repair facilities, car washes, and convenience stores, says each service station sets its own prices. One uncontrollable influence factors into the pricing equation more than any other."Generally, it's based on what they must pay to wholesalers," says Murphy. Stations in towns with a higher per capita income might be asked to pay more per gallon to wholesalers like Exxon and Citgo than stations in nearby, yet less affluent towns.

"They might say, 'This guy over here is in a high-income area -- we can get away with it,'" says Murphy.

When that happens, says one of the service station owners the Advocate spoke with, who asked not to be named, "we have to pass it along to our customers -- we have no choice. Otherwise, we wouldn't be in business."

Gas companies divide most states into zones and charge dealers within each zone different wholesale prices based on relative wealth, isolation and other factors. Prices are set based on what the oil companies determine each specific market will bear.

In Simsbury, explains the station owner, "we're definitely charged more" for gas. "We pay more than the rest of the state just because of where we are."

The good news? State lawmakers are trying to do something about the problem. State Attorney General Richard Blumenthal, Rep. John Wayne Fox (D-Stamford), and Rep. Christel Truglia (D-Stamford) have been vocal opponents of zone pricing, and have introduced several bills within the past few years seeking to eliminate the practice. None have become law.

"Zone pricing is invisible and insidious," Blumenthal testified during public hearings back in 2000, before the House Judiciary Committee. "It distorts the free market. The power of the major oil companies to charge inflated, excessive, arbitrary prices results from gasoline dealer franchise agreements dictating that the gasoline dealers are required to purchase products from a single supplier.

"As a result of such sole source provisions, gasoline dealers are powerless to seek or shop for a cheaper supply of gasoline," Blumenthal continued. "Hence, consumers in the higher price zones pay a higher retail price."

Blumenthal et al. will likely propose another zone pricing bill during this year's legislative session.

In the meantime, Jim McPherson, a spokesman for AAA's Hartford office, offers these words of advice: "Motorists concerned about the price of gasoline can often get good results when they shop around."

charris@hartfordadvocate.com

Chris Harris can be reached at charris@hartfordadvocate.com.