europe.cnn.com Thursday, February 6, 2003 Posted: 0018 GMT

LONDON (Reuters) -- Oil prices held firm but gold eased after U.S. Secretary of State Colin Powell delivered his key address on Iraq to the United Nations Wednesday.

Oil prices also found support from U.S. inventory data showing a steep fall in stocks of U.S. heating oil, as freezing temperatures stoked demand and distributors began to hoard supplies ahead of a possible war.

In London, benchmark Brent crude for March delivery rose 27 cents to $31.36 a barrel, while U.S. light crude rose 22 cents to $33.80.

In a presentation to the U.N. Security Council, Powell argued that Iraq had concealed equipment from its suspected weapons programs to flout the U.N. inspectors searching the country for evidence of chemical, biological and nuclear arms.

Traders and analysts said Powell's address was largely as expected and, on the oil markets, some profit-taking set in after his speech, taking Brent crude prices off a session high of $31.80.

Gold prices reel

In the gold market, profit-taking sent prices reeling from 6-1/2 year highs in volatile trading after Powell spoke.

New York gold futures had hit their highest level since August 1996 on safe-haven buying beforehand.

At the COMEX division of the New York Mercantile Exchange, gold for April delivery fell more than $13 from its peak, ending down $2.70 at $377.20 an ounce. It topped at $390.80 overnight and dipped to $373 after Powell spoke.

"I guess it's a classic example of buying the rumor and selling the news," said Drummond Gill, head of spot trading at bullion dealer ScotiaMocatta in Toronto. "I think the jury is still out. I think he did a

good job of trying to make the case."

Spot gold hit $388.50 and closed Wednesday at $375.60/6.60, off from $378.65/9.15 at Tuesday's close. London bullion dealers fixed the afternoon spot reference price at $382.10 an ounce.

Steep drop

Oil prices were kept firm by data showing a steep drop in stocks of U.S. oil products.

"You could follow these numbers for a decade without coming across a set that are quite as stark as these," said J.P. Morgan's Paul Horsnell.

"The U.S. oil products systems is on the verge of an implosion and it will take quite some time to get things back to normal," he added in a research note.

Distillate stocks, including diesel fuel and heating oil, dropped by 10.3 million barrels to 112.1 million barrels in the week to last Friday, according to U.S. government data.

"That's far above what was expected from weather," said Jim Ritterbusch, president of Ritterbusch and Associates. "Distributors are stocking up in advance of a war."

Overall crude stocks fell slightly, according to industry figures, but rose slightly, according to government statistics as a two-month-old strike in Venezuela, the world's fifth largest oil exporter, relinquished its stranglehold.

Venezuela output

Venezuela's striking oil workers said on Tuesday crude output was 1.2 million barrels per day, although President Hugo Chavez, whom the strikers are trying to force to resign, said output was approaching 2.0 million bpd.

In January, the Organisation of the Petroleum Exporting Countries agreed to increase output to help compensate for the effects of the Venezuelan strike.

But last weekend, OPEC ministers warned that as Venezuelan crude was coming back onstream, there could be a supply glut by the second quarter when demand traditionally drops off with the end of cold weather in the northern hemisphere.

Some analysts predict that the war premium built into prices will quickly melt away if the war proves short-lived.

www.forbes.com Reuters, 02.05.03, 6:34 PM ET

CARACAS, Venezuela, Feb 5 (Reuters) - Venezuela's government plans to set a fixed exchange rate of 1,600 bolivars to the U.S. dollar as part of new currency controls aimed at staving off the economic impact of a two-month opposition strike, government sources told Reuters on Wednesday. The Venezuelan currency, which last traded at 1,853 bolivars to the U.S. dollar, plummeted about 24 percent from the start of the year until the government shut down currency trading two weeks ago. The bolivar fell 46 percent against the greenback last year. Venezuela suspended currency trading from Jan. 22 to prepare a strict currency control regime to protect its reserves and the bolivar during the strike aimed at forcing leftist President Hugo Chavez from office. "The rate will be 1,600 bolivars," one of the government sources told Reuters on condition of anonymity. An opposition strike, started on Dec. 2, battered the oil-reliant economy by choking off the petroleum exports that accounts for half of the government's revenues. Officials last week said that the government would begin with a single fixed exchange rate that would be adjusted on a monthly basis and could later move to a dual rate.

www.dailytimes.com.pk

LONDON: OPEC oil output edged higher in January as Saudi Arabia opened the taps to compensate for some of the shortage from strike-bound Venezuela, a Reuters survey found on Wednesday. January production rose 380,000 barrels a day from December to 25.65 million bpd but remained 1.67 million below volumes in November, before the Venezuelan strike, according to the survey of industry officials and monitors. Extra supplies from Saudi Arabia, the UAE, Nigeria and Iraq outweighed a further decline from Venezuela where rebel oilworkers kept a strangehold on exports in their bid to force President Hugo Chavez from office. While Caracas by the end of the month had restored output above a million barrels daily, average production was only 650,000 bpd, versus a million bpd in December and pre-strike November output of more than three million. Expectations are for a further gradual increase in February. Geneva-based consultancy Petrologistics is projecting 1.3 million bpd for the month. Saudi Arabia added 500,000 bpd to reach 8.55 million in January. Riyadh appeared ready to ratchet production higher but shipping and industry monitors said it had encountered difficulty in marketing any more. Saudi Oil Minister Ali al-Naimi has promised to keep world markets adequately supplied if a US-led war on Iraq comes while Venezuelan output remains hamstrung. Petrologistics is projecting 8.67 from Saudi in February but with spare capacity stretched in most other OPEC members, the group looks likely to fall short of its new February target. Naimi said at the weekend that Riyadh aimed to keep flows from the 10 OPEC members with quotas, excluding Iraq, to the 24.5 million bpd limit that ministers introduced in mid-January. That target is not officially implemented until February 1 but with Venezuela still way below par, the OPEC 10 in January remained a long way short of the target. They pumped 23.16 million bpd, up 290,000 bpd from December. Apart from Saudi, only the UAE and Nigeria were able to call on spare capacity to add any significant volume, rising by 50,000 bpd and 60,000 bpd respectively. Ironically, second only to Saudi in lifting output was Iraq, helping contain prices at about $33 a barrel for US crude in the countdown towards what most in the oil industry see as an inevitable war. Baghdad’s exports under the UN oil-for-food programme ran at 1.74 million bpd in January, up 90,000 bpd on the month. It pumps another 750,000 bpd for domestic use and border trade. With possible war only weeks away, the United States easily remains Iraq’s biggest customer. Traders estimated Iraqi sales to the US approached a million barrels daily, double last year’s average as refiners sought to fill the gap from Venezuela. The Reuters survey seeks a best estimate of flows from OPEC countries based on the views of officials, industry monitors and analysts inside and outside member countries. —Reuters

biz.yahoo.com U.S. Antitrust Regulator Clears Coca-Cola FEMSA Acquisition of Panamco Wednesday February 5, 6:30 pm ET

MEXICO CITY & MIAMI--(BUSINESS WIRE)--Feb. 5, 2003--Coca-Cola FEMSA, S.A. de C.V. ("Coca-Cola FEMSA") (NYSE:KOF - News) and Panamerican Beverages Inc. ("Panamco") today announced that they have received notice that the waiting period under the U.S. Hart-Scott-Rodino Antitrust Improvements Act with respect to the proposed acquisition by Coca-Cola FEMSA of Panamco has been terminated early.

The closing of the proposed acquisition remains subject to the satisfaction or waiver of other conditions. These conditions are described in the preliminary proxy statement filed by Panamco with the U.S. Securities and Exchange Commission on Jan. 30, 2003.

About Coca-Cola FEMSA

Coca-Cola FEMSA, S.A. de C.V. produces Coca-Cola, Sprite, Fanta, Lift and other trademark beverages of The Coca-Cola Company in the Valley of Mexico and the Southeast Territories in Mexico and in the Buenos Aires Territory in Argentina. The Company has eight bottling facilities in Mexico and one in Buenos Aires and serves more than 283,650 retailers in Mexico and 76,400 retailers in the greater Buenos Aires area. Coca-Cola FEMSA currently accounts for approximately 3.4% of Coca-Cola global sales, 25.0% of all Coca-Cola sales in Mexico and approximately 36.5% of all Coca-Cola sales in Argentina. The Coca-Cola Company owns a 30% equity interest in Coca-Cola FEMSA.

About Panamco

Panamco is the largest soft drink bottler in Latin America and one of the three largest bottlers of Coca-Cola products in the world. The Company produces and distributes substantially all Coca-Cola soft drink products in its franchise territories in Mexico, Brazil, Colombia, Venezuela, Costa Rica, Nicaragua, Guatemala and Panama, along with bottled water, beer and other beverages in some of these territories. Panamco is an anchor bottler of The Coca-Cola Company.

ADDITIONAL INFORMATION AND WHERE TO FIND IT

On Jan. 30, 2003, Panamerican Beverages Inc. filed with the Securities and Exchange Commission a preliminary proxy statement regarding the proposed business combination transaction referred to in the foregoing information. In addition, Panamerican Beverages Inc. will prepare and file with the SEC a definitive proxy statement and other documents regarding the proposed transaction. Investors and security holders are urged to read the definitive proxy statement, when it becomes available, because it will contain important information. The definitive proxy statement will be sent to shareholders of Panamerican Beverages Inc. seeking their approval of the proposed transaction. Investors and security holders may obtain a free copy of the definitive proxy statement (when it is available) and other documents filed with the SEC by Panamerican Beverages Inc. at the SEC's Web site at www.sec.gov. The definitive proxy statement (when it is available) and these other documents may also be obtained for free from Panamerican Beverages Inc. by directing a request to Laura I. Maydon (lmaydon@panamcollc.com). Free copies of documents filed with the SEC by Coca-Cola FEMSA, S.A. de C.V. may be obtained at the SEC's Web site at www.sec.gov or by directing a request to Alfredo Fernandez (afernandeze@kof.com.mx).

CERTAIN INFORMATION CONCERNING PARTICIPANTS

A detailed list of names, affiliations and interests of participants in the solicitation of proxies of Panamerican Beverages Inc. to approve the proposed business combination is included in the preliminary proxy statement.

Contact:

 Coca-Cola FEMSA, S.A. de C.V., Mexico D.F.
 Investor Relations:
 Alfredo Fernandez, 52/55-5081-51-20
 afernandeze@kof.com.mx
  or
 Panamco, Miami
 Investor Relations:
 Laura Maydon, 305/929-0867
 lmaydon@panamcollc.com

www.news.com.au February 06, 2003

WORLD oil prices rose as US Secretary of State Colin Powell presented declassified evidence to try to persuade the United Nations Security Council that Iraq was defying weapons inspectors.

Prices shot up ahead of Powell's speech as traders sweated over the possible content, but then settled back a little, still closing above the previous day's level.

"What you have for the oil market right now is uncertainty," Bear Stearns market analyst Fred Leuffer said.

"There is a confluence of low inventories in the United States, Venezuelan production running at less than 40 per cent of normal, and of course prospects for war."

Leuffer estimated oil prices carried a premium of six to eight US dollars because of the war risk.