February 8, 2003 www.newsday.com

A powerful bomb rocked an exclusive club in Bogota Friday night, killing more than 20 people, leaving about 100 injured and setting the 10-story building on fire. The blast showered bricks and mortar onto a busy boulevard, denting and damaging cars that were passing by. Bogota Mayor Antanas Mockus said a theory that the explosion in the El Nogal Club - frequented by politicians and business executives - may have been an accident had been discarded by investigators, who determined that explosives caused the blast. Leftist rebels have recently begun bringing their four-decade war from the countryside into the cities. "It was a huge explosion. I thought an airplane had crashed outside," said Luis Moreno, who lives across the street from the club on Seventh Avenue in north Bogota. The explosion blew out walls of two stories of an interior parking garage, raining rubble onto the street below. Jorge Velandia, who works at the club's mini-golf course, said the blast opened up a hole in one of the floors, and people tumbled through. Black smoke poured from the building, and flames licked out from upper windows. Media reports said that people were still trapped inside. Catalina Ortíz told Radionet she was driving in front of the club when she felt the explosion and thought her car had been hit. "When I looked back I saw the club was on fire, with a ball of fire coming out of the third or fourth floor," she said. Nearby buildings were also damaged in the explosion, authorities said.

Saturday, February 8, 2003 www.canoe.ca By CP

Gas guzzlers alert: a war in Iraq will cause a lot more pain at the pump. Canadian drivers and businesses that guzzle lots of fuel are pumped with anger over gasoline prices that are spiking because of war fears and concerns about world oil supply. And experts warn, if war erupts in the Mideast, pump prices here will likely leap even further. "An attack on Iraq will temporary further cause a price shock because everyone will be afraid of what the longer term implication is," said Wilf Gobert, an analyst with Peters & Co. in Calgary. Energy experts are blaming geopolitical events: a looming war in Iraq, a national strike in Venezuela that has affected oil production and a 26-year low in U.S. oil inventories.

www.detnews.com By Alexandra Olson / Associated Press Leslie Mazoch / Associated Press

Alberto Salazar, bottom, and Jesus Indriago, behind, wait more than six hours with other motorists hoping to fill up at a service station before it runs out of gasoline in Caracas, Venezuela, Friday. CARACAS, Venezuela -- Venezuelan motorists waited for hours to fill up at gasoline stations Friday -- a sign life has been slow to return to normal after a two-month strike that failed to oust President Hugo Chavez and left the economy in shambles. Thousands of employees at the state oil monopoly, Petroleos de Venezuela S.A, are still on strike or have been fired by Chavez. The government has raised crude oil production to about a third of normal, but refineries are largely idle. Energy and Mines Minister Rafael Ramirez said Friday that gasoline production was 150,000 barrels a day, compared to 250,000 before the strike. He said Venezuela would import 12 million barrels of gasoline this month to make up for shortages. Venezuela -- the world's fifth-largest oil exporter -- has spent more than $500 million on fuel imports since the strike began Dec. 2. Because of the dependency on imports, "the situation with gasoline goes up and down," Ramirez said. Hundreds of drivers joined lines stretching for several miles at Caracas service stations, most of which were dry and waiting for deliveries. Earlier this week, it took 20 minutes at most to fill up in Caracas, though huge lines had persisted in the rest of the country. "The strike is over but we are still going through a critical moment," said Wilmer Acevedo, 30, a tow truck driver waiting at one station. "If I don't get gasoline I can't work." The strike ended earlier this week in every other industry. But some restaurants and stores were having trouble opening because of the gasoline scarcity, which in turn was causing delays in deliveries. The shortages could worsen as the government implements exchange controls to protect its foreign reserves and the bolivar currency, which lost a quarter of its value during the strike. Dollar requests could take as long as 45 days to process under the new rules, which could delay imports. Venezuela depends on imports for 60 percent of raw materials. The government fixed the bolivar at 1,598 bolivars to the dollar. Ramirez said crude oil production was 1.9 million barrels a day, while dissident oil monopoly executives put the figure at 1.3 million. It was 3 million before the strike. "It will take a couple of months to bring refining capacity back up to a normal operating rate," said Ed Silliere, vice president of risk management at Energy Merchant LLC in New York. "Part of the problem is they have fired a lot of the key people that used to run these things. You can't replace these people that easily." Chavez has fired more than 9,000 of the state oil company's 40,000 employees, vowing to use the strike to restructure, downsize and eliminate dissent within the company. The president vowed Friday not to rescind the firings. "Not if I were crazy," he declared in a speech to diplomats. Chavez said many fired executives were the same ones who led an oil strike in April that helped prompt a brief coup. Chavez rehired them after regaining power. The fate of the fired workers is a sticking point in negotiations between the government and opposition sponsored by the Organization of American States. Opposition leaders refuse to call off the oil strike until the government rehires the fired workers and agrees to an early vote on Chavez's rule. Citing months of economic and political turmoil, Venezuela's opposition -- a combination of leftists, conservatives, labor unions and business groups -- wants to amend the constitution to end Chavez's six-year term and call general elections this year. The government insists a referendum must wait until halfway through a president's term, as provided in the constitution -- in Chavez's case, August 2003. Chavez warned a coalition of six nations, including the United States, that backs early elections to avoid "complicating the problem further" and recognize that Venezuela's government is legitimate and democratic. Nobel Peace Prize Laureate Jimmy Carter proposed both plans as a solution to Venezuela's crisis. On Friday, the former president praised both sides for using his proposals "as a basis for progress," and the opposition for scaling back the strike.

economictimes.indiatimes.com REUTERS[ SATURDAY, FEBRUARY 08, 2003 11:46:07 PM ]

WASHINGTON: The U.S. economy added jobs at the fastest rate in more than two years in January and the jobless rate sank to a four-month low of 5.7 per cent, kindling hopes the recovery might be gathering strength.

But some analysts cautioned the strength in Friday's closely watched jobs report was exaggerated by quirks in retail hiring and the way in which the government smooths out the payrolls series to account for seasonal fluctuations.

Stocks failed to gain ground on the report, which was overshadowed in financial markets by a government alert about a possible terrorist threat and by a growing sense that a U.S. war with Iraq might be drawing near.

Payrolls outside the farm sector jumped by 143,000 -- more than double the 70,000 expected by economists and the biggest rise since November 2000, before the recession set in, the Labor Department said. Jobs fell 156,000 in December.

The unemployment rate hit its lowest level since September and was three tenths of a per centage point lower than December's 6 per cent.

"The surge in payrolls is clearly suggesting that we may be turning the corner of a very stagnant job market," said Anthony Chan, chief economist at Banc One Investment Advisors in Columbus, Ohio.

But Chan warned: "We should not forget that virtually 70 per cent of the rise in the payrolls was due to seasonal factor glitches associated with the retail sector."

The jobs data pushed bonds down initially, but they later staged a comeback as stocks faltered. The blue-chip Dow Jones Industrial average fell 65 points to 7,864. The tech-laden Nasdaq Composite Index fell 19 points to 1,282.

Retailers in the final months of 2002 anticipated that consumers would stay away from the shops, frightened off by weak economic prospects and uncertainties about a potential war with Iraq. So they hired fewer seasonal workers than they typically do in the holiday season.

But with fewer temporary workers on the payrolls, there were not as many layoffs in January as the Labor Department's seasonal adjustment process expected and that meant the latest month's hiring trends appeared very strong.

"There were some elements of exaggeration in the payroll numbers," said Henry Willmore, chief U.S. economist, Barclays Capital in New York.

Underscoring fears the economy might not be out of the woods, the a report from the Federal Reserve showed that consumers pulled back sharply on their accumulation of credit- card debt late last year.

The Fed said consumer debt fell by $4.0 billion in December, the largest drop since a $5.8 billion drop in December 1990, when the U.S. economy was in the throes of recession.

In per centage terms, consumer debt declined at a 2.75 per cent annual rate in December, the biggest monthly decline since a 3 per cent drop in April 1992.

The data surprised Wall Street analysts who expected consumer debt to rise in December.

With economic signals mixed, analysts did not shift their expectations about future Federal Reserve policy moves based on Friday's data. Most economists think the central bank will keep interest rates at four-decade lows of 1.25 per cent for now.

President Bush, pushing for congressional approval for his $695 billion tax cut plan, said he wants to see more improvement in the job market and the broad economy.

"The economy is in its second consecutive year of growth, yet it is not growing fast enough," Bush said at a ceremonial swearing-in for Treasury Secretary John Snow.

The president released his "Economic Report of the President," which forecast faster economic growth and played down the impact of his sweeping tax-cut proposals on government debt and interest rates.

Critics have charged the package is too tilted toward the wealthy and that it will deepen budgetary red ink.

The U.S. economy suffered a sharp slowdown in the final three months of last year, limping along at an annual rate of just 0.7 per cent.

But there have been a few hints of improvement lately, with some data series showing manufacturing reviving. Within the jobs report, there were gains in employment in a variety of sectors, though factory jobs fell by 16,000.

Despite glimmers of hope in the jobs report, it was clear the labor market is far from fully recovered.

Workers did not pocket any gains in their average hourly earnings, which stayed steady in January at $14.98 after a 0.3 per cent rise in December. The work week expanded slightly to 34.2 hours from 34.1 hours in the prior month.

The sluggish trends in the labor market over recent months have caused some economists to draw comparisons with the so-called jobless recovery of the early 1990s, when economic growth returned without solid hiring.

In a separate report on Friday, the Commerce Department said inventories at U.S. wholesalers surged 0.8 per cent in December, posting the biggest gain since the summer of 2000.

While higher inventories can sometimes be a sign businesses are seeing disappointing demand and accumulating unwanted stocks of goods, the latest data were inconclusive.

Some inventory-building may have been caused by stockpiling of petroleum amid worries over a possible war with Iraq and a production halt in Venezuela, a major oil-producing nation.

washingtontimes.com By Hil Anderson UPI Chief Energy Correspondent

 LOS ANGELES, Feb. 7 (UPI) -- Energy prices will remain on the high side for the near future as cold winter weather boosts natural gas demand at the same time world tensions keep the oil markets on edge, analysts predicted Friday 
 The gloomy forecast from the Energy Information Administration appeared to be on the right track Friday as the New York Mercantile Exchange saw crude prices top $35 per barrel while heating oil futures surged to the highest level in two years. 
 The reasons for the bullishness, which the EIA expected to continue through the winter, boiled down to fears of a war in the Gulf interrupting imports and colder weather in the Midwest and along the East Coast cutting further into reserves of heating oil and gas. 
 Although there has been no actual shortage of oil thus far, the sentiment among traders is to prudently make certain they don't get caught short if the United States and Iraq come to blows in the Gulf at the same time Venezuela's oil industry is handcuffed by ongoing labor and political problems. 
 "World oil markets will likely remain tight through most of 2003, as petroleum inventories and global spare production capacity continue to dwindle amid blasts of cold weather and constrained output from Venezuela," the EIA concluded. "OPEC's efforts to increase output to make up for lower Venezuela output has reduced global spare production capacity to only 2 million barrels per day, leaving little room to make up for unexpected supply or demand surprises." 
 The desire to stock up on oil appeared to become more intense Friday as prices jumped in all NYMEX sectors. NYMEX saw March heating oil climb Friday to a 23-month high of $1.113 per gallon before settling at $1.095, up an impressive 6.86 cents on the day. 
 March crude climbed 96 cents to $35.12 per barrel on NYMEX after the International Petroleum Exchange in London posted a 90-cent gain to $32.34 per barrel. 
 Other NYMEX prices included March gasoline, up 3.87 cents at $1.067 per gallon, and natural gas jumping 21.5 cents to $6.043 per million BTU. 
 The increases came as the EIA estimated that natural gas demand this winter would be 8 percent higher than last year while gas in storage has been running 17 percent under the 5-year average. 
 "By the end of this January, working gas in storage was about 35 percent lower than at the end of January 2002 and 17 percent below the previous 5-year average," the EIA said. "Considering not only the currently high world oil prices but also the low storage levels, natural gas prices are likely to remain relatively high through February and perhaps well into spring." 
 The demand for oil was projected to increase 3 percent over the next two years on the assumption that the nation's economy will grow and increased air travel will boost demand for jet fuel. 
 "Spot prices for heating fuels surged as crude oil and natural gas prices rose rapidly in the face of the Venezuelan oil export cutoff and sharply falling levels of domestic natural gas in storage," the EIA said. "Some of these commodity price changes are still working their way to the consumer level." 
 The prospect of higher retail heating oil prices in the Northeast prompted a consumer group to ask the state of New York on Friday to investigate possible price manipulation, stating that the lack of a physical shortage of oil undermines the justification for higher prices. 
 "It looks to us as though there are a few large players in the market that are using the anxiety over Iraq to create an artificial shortage in the New York region," accused Tim Irving, executive director of HEAT USA. "If a few big sellers are able to keep their oil from reaching the market, even for a few days, they can foster anxiety, and sell into that fear at a huge profit." 
 The Pacific Northwest Bonneville Power Administration said Friday that it would seek a rate increase for the hydroelectric electricity it produces, due not only to cold temperatures but also due to a lack of seasonal rains. 
 "We held off proposing higher rates as long as we could, hoping that water and economic conditions would improve," explained BPA Administrator Steve Wright. "Neither has happened. We have had some success with cost management, but much more needs to be done."