www.chron.com Feb. 5, 2003, 12:36AM

NEW YORK -- Crude oil futures ended sharply higher Tuesday, as petroleum products rallied and traders covered short positions ahead of Secretary of State Colin Powell's appearance today at the United Nations.

On the New York Mercantile Exchange, light, sweet crude for March delivery rose 82 cents to close at $33.58 a barrel.

March heating oil rose 4.38 cents to close at 96.19 cents a gallon, while March gasoline jumped 4.38 cents to close at $1.006 a gallon.

Natural gas for February delivery fell .04 cent to settle at $5.762 per thousand cubic feet.

On London's International Petroleum Exchange, March Brent settled up 84 cents at $31.09 a barrel.

There is "anticipation that Colin Powell's presentation to the U.N. Security Council on Wednesday will bring the U.S., if not the world, one step closer to war with Iraq," said Tim Evans, an analyst at IFR Pegasus.

Powell's report to the Security Council will dominate today's headlines, but traders will also be scrutinizing weekly inventory data from the American Petroleum Institute and the Department of Energy.

For the first time in weeks, analysts are expecting the data to show a build in U.S. crude oil inventories, thanks to a surge in imports and low refinery utilization.

Most analysts surveyed by Dow Jones Newswires expect crude stocks to show an average build of 2 million barrels for the week that ended Jan. 31, as Venezuelan shipments to the United States continue to rise.

Venezuelan oil output has climbed to 1.25 million barrels a day, according to dissident staff at state monopoly Petroleos de Venezuela SA.

The increase in Venezuelan production could prompt the Organization of the Petroleum Exporting Countries to consider an output cut in March, OPEC President Abdullah bin Hamad al-Attiyah said Tuesday.

But analysts and some OPEC officials say that much will depend on whether there is a war in Iraq and how much oil production is disrupted as a result.

www.forbes.com Reuters, 02.04.03, 10:16 PM ET

SINGAPORE, Feb 5 (Reuters) - PetroChina has made its first direct sale of gasoline to the U.S. Gulf Coast, taking advantage of a squeeze in U.S. supplies due to a drop in exports from strike-bound Venezuela, traders said on Wednesday. The top Chinese oil firm has fixed a 40,000-tonne parcel of 90-octane gasoline, for early February loading, from the northeast Chinese port of Dalian to the U.S. Gulf, they said. "Chinese barrels normally move to the U.S. via traders or majors when the arbitrage window is open, but this is the first time PetroChina has sold gasoline on a delivered basis," said one trader. She said the cargo was sold to an oil major, but declined to give details. PetroChina <0857.HK> (nyse: PTR - news - people), China's second largest refiner, accounts for about 40 percent of China's total gasoline exports, which amounted to 6.12 million tonnes (51.7 million barrels) in 2002.

www.channelnewsasia.com First created : 05 February 2003 1037 hrs (SST) 0237 hrs (GMT) Last modified : 06 February 2003 0928 hrs (SST) 0128 hrs (GMT)   World oil prices rose on Tuesday as nerves tightened on the eve of Secretary of State Colin Powell's address on Iraq to the UN Security Council.

US gasoline led the price jump as the 2-month disruption to supply from strike-bound Venezuela and strong winter heating fuel demand drains US refined product inventories.Advertisement In New York, March crude futures rose 82 cents, or 2.5 percent, to US$33.58 a barrel.

Meanwhile Brent crude in London rose 84 cents to US$31.09.

Analysts said that having taken a back seat on Monday, the Iraq crisis was returning to the fore ahead of Mr Powell's address to the UN Security Council on Wednesday.

Mr Powell is expected to try to back up Washington's claim that Iraq has not been complying with a key disarmament resolution.

On Monday, he said while he will not have "smoking gun" evidence of Iraq's defiance of disarmament demands he will make a "convincing case" that Baghdad possesses banned weapons.

US oil supplies have already been tightened by a 65-day opposition strike in Venezuela, which normally supplies over 13 percent of American crude and refined product imports.

Venezuela's oil supply is gradually recovering after the government succeeded in using replacement workers to restart operations.

The opposition there has called off strike in the non-oil sectors.

news.ft.com By Carola Hoyos in London and Andy Webb-Vidal in Caracas Published: February 5 2003 4:00 | Last Updated: February 5 2003 4:00

The return of Venezuelan exports is prompting the Opec oil cartel to consider reining in crude oil production, despite the advancing beat of Washington's war drums.

Bijan Namdar Zangeneh, Iran's oil minister, said yesterday: "If we have Iraq and Venezuela sustaining production, I'm sure we will have to reduce production in the second quarter."

World oil seasonal demand usually drops 2m barrels a day in the second quarter of the year, a factor - together with Iraq and Venezuela - that Opec ministers will have to take into account when they meet to review their 24.5m b/d output quota next month.

Crude oil production from Venezuela has recovered at a faster pace than many analysts expected, following the strike by managers at Petróleos de Venezuela (PDVSA), the state oil company.

Venezuela was producing 3.2m b/d in November, and the stoppage left output as low as 150,000 b/d at one point in December.

Ali Rodriguez, head of PDVSA, said output had now reached 1.8m b/d, and "near-normal" levels would be reached by the end of February.

But there is scepticism about the current figure, and even more about the chances of PDVSA being able to raise output much above present levels in the coming weeks, due to the lack of experienced technicians for the maintenance of oil wells and facilities.

Dissident PDVSA managers, several thousand of whom have been dismissed and appear unlikely to return, say crude production currently stands at 1.2m b/d and is close to reaching a "technical ceiling" of 1.5m b/d.

Cashflow problems are likely to prevent PDVSA from carrying out vital investment to keep up capacity, particularly from its heavier oilfields, analysts say.

"We don't see them reaching 2.5m before the end of the year - it's going to ramp up quite slowly here," said Fareed Mohamedi, chief economist at PFC Energy, a Washington-based consultancy. Local oil industry sources estimate that exports currently stand at about 500,000 b/d, almost all of which is crude oil.

So far PDVSA has been using its own vessels to carry its exports, but Dow Jones news wires reported yesterday that a major international shipping company had received the green light from insurers to again load oil and products from Venezuela.

The situation within the country continues to look bleak, however.

PDVSA has so far been unable to restart its Paraguaná refinery, the world's largest, and fuel shortages, which are still acute in many parts of Venezuela, look set to continue for some time.

The government said yesterday that it would import 12m barrels of petrol to meet demand in February - enough to satisfy the country's daily consumption levels.

townsvillebulletin.news.com.au 05feb03

WAR jitters sent local share prices decisively lower today ahead of US Secretary of State Colin Powell's UN presentation on Iraq, weighing heavily on world markets as gold prices surged. The benchmark S&P/ASX 200 index fell 18.6 points to 2928.0, while the all ordinaries index declined a similar amount to 2907.5 at 1213 AEDT.

On the Sydney Futures Exchange, the March share price index contract was down 19 points to 2915.0 - a 13 point discount to the underlying index - on a volume of 5113 contracts.

The sirens of war and weak corporate guidance undermined markets, with investors selling off or staying on the sidelines until a clearer picture emerged on a timetable for US action over Iraq, unloading stocks and collecting profits from a previous two-day rally.

Analysts said there was little reason to buy ahead of the UN address.

In London, shares in Britain's biggest companies ended the day mired in the red, hammered lower by weak financial stocks and a warning by spirits group Allied Domecq that its earnings growth had stalled.

The FTSE 100 benchmark index ended down 99.3 points, or 2.7 per cent, at 3590.1, erasing most of its 122-point gain yesterday. Other European markets also slumped. The DJ Stoxx 50 index of leading euro-zone shares plunged 3.81 per cent to 2184.23 points.

The Dow Jones industrial average lost 92.09 points, or 1.14 per cent, falling to 8016.92, while the tech-heavy Nasdaq shed 17.79, or 1.34 per cent, to close at 1306 points.

The broader Standard and Poor's 500 was 14.79 points lower, or 1.71 per cent, at 845.53.

Powell was to present the US case against Iraq at a special UN Security Council meeting. But he said it would not include "smoking gun" evidence of Iraqi malfeasance but a "convincing case" that Baghdad continues to defy UN disarmament demands.

Shaw Stockbroking head dealer James Spiteri said the market remained cautious but had picked up from earlier lows.

"The market is predictably weak, although it has come off its earlier lows, it is just slightly improving," Mr Spiteri said.

At 1222 AEDT, AMP tumbled 23 cents, or 2.5 per cent to $8.97 after reaching a record low of $8.95 in earlier trade.

Mr Spiteri said the drop was because of AMP's exposure to the UK market which fell sharply overnight.

"There was a weaker UK market overnight ... (and AMP) may be forced to raise more money as provisions against commitments in the UK," he said.

"There is also a little bit of scepticism over global insurance players after overnight in the US the American Insurance Group said it had not taken into account sufficient provisions."

Mr Spiteri said the banking sector was also predictably weaker, with ANZ shares shedding 23 cents to $16.92 at 1227 AEDT.

National Australia Bank shares gave up 20 cents to $31.33, Westpac shed 15 cents to $13.81 and Commonwealth Bank lost 15 cents to $26.23.

Media stocks were also down. News Corp was down 25 cents to $11.06 while the preferred scrip lost 22 cents to $9.24 at 1229 AEDT.

In other stocks Kerry Packer's PBL gave up two cents at $8.33 while Fairfax was four cents lower at $2.98.

Gold prices surged overnight, climbing to six-year highs as war jitters continued.

The spot price of gold in Sydney gained $US7.425 to $US383.55 per fine ounce at 1238 AEDT.

Gold stocks rallied on the back of the increase, with Newcrest Mining gaining two cents to $6.65, Sons of Gwalia lifted three cents to $2.31 and Lihir Gold surged four cents, or 2.63 per cent, to $1.56.

The resources sector was weaker. At 1244 AEDT, BHP Billiton fell two cents to $9.10, Rio Tinto lost 16 cents to $32.75 and Woodside Petroleum dropped 10 cents at $11.17.

The retail sector was mixed. David Jones was steady at $1.07, Woolworths fell six cents to $11.70 and Coles Myer was five cents weaker at $6.25 at 1249 AEDT.

In other news, grain handler and marketer GrainCorp lifted more than three per cent, or 34 cents, to $10.30 after the company said it was talking about a possible merger with the unlisted Grainco Australia.

Specialist broadband telco, Uecomm's shares fell 0.5 of a cent to 15.5 cents after reporting a $5.5 million loss in 2002 an improvement from the $55.2 million loss recorded the previous year.

The maker of the iconic Hills clothes hoist, Hills Industries' shares gained one cent to $3.25 after booking a $13.977 million net profit for the first half, compared to $12.166 million in the previous corresponding period.

The top traded stock by volume was Lihir Gold with 10.87 million shares changing hands worth $17.07 million.

Preliminary national turnover was 359.56 million shares worth $724.3 million, with 321 rising, 481 falling and 336 steady at 1258 AEDT.

"It's a very thin market, not a lot of volume. There is too much negative sentiment going into the speech. We're going into war and everyone knows it," Michael Driscoll, head of listed trading at Bear Stearns in the US.

On the corporate front, a shock $US1.8 billion ($3.04 billion) charge from insurer American International Group and news from Goodyear that it is eliminating its fourth-quarter dividend further undermined Wall St sentiment.

World oil prices bubbled higher as nerves tightened. New York's benchmark light sweet crude March-dated futures, which had slumped in early trade after the end of Venezuela's general strike, reversed course to end 82 cents higher at $US33.58 a barrel in New York.

In London, reference Brent North Sea crude oil for March delivery, which also had declined earlier, rose 83 cents to $US31.08 per barrel. AAP, AP, AFP