www.forbes.com Reuters, 02.19.03, 1:00 PM ET

NEW YORK, Feb 19 (Reuters) - NYMEX crude oil futures hit fresh 29-month highs midday Wednesday, lifted by surging heating oil and gasoline futures, ahead of Thursday's inventory reports forecast to show draws for all three segments. Heating oil in the New York Harbor cash market remained strong on tight supplies, and bolstered futures, traders said. Gasoline futures firmed on Midwest refinery trouble and talk of another similar problem at a Texas refinery, traders said. At 12:50 p.m. EST (1750 GMT), NYMEX March crude was up 28 cents at $37.23 a barrel after soaring to $37.35, the highest for prompt crude since September 2000. It dipped to $36.36 early. NYMEX April crude gained 23 cents to $35.74 ahead of the March contract's expiry on Thursday. In London, April Brent was off 9 cents at $32.45 a barrel. Government oil inventory data to be released Thursday were expected to show that U.S. crude oil stocks fell modestly by 1.0 million barrels, a Reuters survey on Tuesday showed. Analysts also expected a draw of 3.0 million barrels in distillates, including heating oil and a minor decline of 500,000 barrels in gasoline stocks. "Gasoline is up because of expectations that tomorrow's weekly inventory data will show a stock draw as Venezuela seems to be taking the gasoline imports away from the United States," said Ed Silliere, energy market analyst at Energy Merchant LLC in New York. Silliere also cited a downed gasoline-making unit at BP Plc's <BP.L> (nyse: BP - news - people) 420,000 barrel per day refinery in Whiting, Indiana, as supportive. Other traders said there was talk of a fluid catalytic cracker down atthe ChevronTexaco (nyse: CVX - news - people) 90,000 bpd refinery in El Paso, Texas, also fueled buying in gasoline futures. The company said its policy is not to comment on such reports. Heating oil futures were supported by forecasts of colder weather returning to the U.S. Northeast, the biggest consumer of heating oil, by next week. Private weather forecaster Meteorologix said after above-normal temperatures Friday to Saturday in the U.S. Northeast, readings will turn below normal on Sunday. In the next 6 to 10 days, it expects regional temperatures to be much below normal. Traders said the market remains wary as the United States and Britain, despite strong international opposition, are pushing for a new U.N. resolution that would authorize the use of force to disarm Iraq. But the new resolution may not be put to a vote before early March, after another report by chief weapons inspector Hans Blix, diplomats said on Wednesday. Before deciding about launching a military strike against Iraq, the U.S. appears willing to devote a few weeks to getting international support, leading analysts and diplomats to believe a possible attack would not take place before mid-March. Meanwhile, the Nigerian government said an urgent meeting it called on ending a strike by senior oil workers had been postponed by one day, to Thursday, to allow union leaders more time to arrive. Earlier, Nigeria's Labor Minister Musa Gwadabe said the government would ask striking oil workers to call off their action immediately before any negotiations. The strike, launched Saturday, has so far not affected oil Nigeria's oil exports as replacement staff has taken over the striking workers at oil terminals. On Wednesday, OPEC said its oil production rose by 820,000 barrels a day (bpd) to 25.68 million bpd in January from December, as Saudi Arabia, Nigeria and Iran increased output to offset a decline in Venezuelan production. Venezuela, another OPEC member, is struggling to restore crude production curbed by a strike that started Dec 2. It supplied about 13 percent of U.S. daily oil imports before the strike. NYMEX March heating oil was up 2.36 cents at $1.0890 a gallon, trading between $1.055 and $1.093. NYMEX March gasoline gained 0.90 cent to $1.0035 a gallon, trading 98.00 cents to $1.02.

www.vheadline.com Posted: Wednesday, February 19, 2003 By: Gustavo Coronel

VHeadline.com commentarist Gustavo Coronel writes: Governments often approach the fight against poverty with strategies based on giving rather than on empowering the people to become producers. They claim that since the poor has no land, no money, no food, they should be given all of these things so that they can stop being poor.

Intentions might be good but giving does not work. It seems to produce initial positive results but, after a while, the poor revert to being poor. Still worse, poor and frustrated.  Land distribution and reform has been a recurrent theme in the fight against poverty in many developing countries . The record is, so far, not encouraging.

Some of the better experiences, such as those in Taiwan and South Korea, have included ingredients which are often absent in other land reform programs: financial credits and technical assistance.

In Venezuela the most ambitious land reform program in record was the one undertaken by Accion Democratica in the decade of the 1960s. It was a massive effort based in a detailed study made by the Agrarian Reform Commission. The program was executed entirely within the law. To support the program several Institutions were created or reinforced, such as the Agrarian National Institute, the Agricultural Bank and a Technical Assistance Division at the Ministry of Agriculture. Thousands of tractors were imported, together with other agricultural equipment. Most of the land distributed was public land but some private holdings were duly expropriated. The main efforts at land redistribution took place in the central portions of the country, in the Andes and in the States of Barinas and Portuguesa. Some were very successful such as the Turen Cooperative, in Portuguesa, which to this day is the Granary of Venezuela.

But it soon became evident that land reform does not yield instant results and that the effort has to be sustained over long periods of time to produce significant change.  Three years after starting the program, only 60,000 families had been given ownership titles, half of the target.  A modest 8% gain in agricultural output had been obtained. There is no doubt, however, that this program started by President Betancourt established a new class of small landholders in the country. By 1980 about 200000 families had been given ownership of land and, by 1985, a total of 316000 families were landowners. Very few, however, became organized in cooperatives. After this time, the Agrarian Reform lost drive and probably many of these rural families emigrated to the cities, after receiving little or no permanent government assistance.

Land reform in Venezuela, therefore, has a history. It did not start with Chavez. Moreover, what Chavez has done in this respect is almost nothing. The new Land Law is designed to attack private landowners but not to promote the well-being of the rural poor. The only program started by Chavez, The "Fundos Zamoranos", the Zamora Landholdings, has been a total failure due to the lack of financial and technical support. As a result the people involved in this modest program are now worse off and very angry with the government. They feel that they have been used for political propaganda and are now reacting openly against the program.

In general the failure of these programs has to do with the absence of commitment by the government after the initial ceremony of land "distribution" has been televised. The day after finds the colonies without water, without fertilizers, without guidance. The only thing that the government was interested in was the political impact of the initial events, usually adorned with a long speech by the President.

The efforts by this government to improve the lot of the rural poor are restricted to what the President improvises over TV. These improvisations usually die a merciful death or become laughable programs such as the conversion of rooftops into chicken coops. Others are simply absurd such as the Rural Kit, still in operation, a program through which each rural family obtained a Kit consisting of one pig, 100 chicks, a bag of cassava roots and a set of plows and hoes.

• Predictably the family would eat the pig and sell the chicks. This government advocates a return to  "conuco" farming, the most primitive form of agriculture used by the Arawaks of pre-colonial Venezuela.

These things need to be said in order to challenge the notion that President Chavez is a pioneer in Land Reform. Not only he is not a pioneer but he has done little besides talking about the issue. Today the Venezuelan rural poor are in  a  worse situation than before.

Gustavo Coronel is the founder and president of Agrupacion Pro Calidad de Vida (The Pro-Quality of Life Alliance), a Caracas-based organization devoted to fighting corruption and the promotion of civic education in Latin America, primarily Venezuela. A member of the first board of directors (1975-1979) of Petroleos de Venezuela (PDVSA), following nationalization of Venezuela's oil industry, Coronel has worked in the oil industry for 28 years in the United States, Holland, Indonesia, Algiers and in Venezuela. He is a Distinguished alumnus of the University of Tulsa (USA) where he was a Trustee from 1987 to 1999. Coronel led the Hydrocarbons Division of the Inter-American Development Bank (IADB) in Washington DC for 5 years. The author of three books and many articles on Venezuela ("Curbing Corruption in Venezuela." Journal of Democracy, Vol. 7, No. 3, July, 1996, pp. 157-163), he is a fellow of Harvard University and a member of the Harvard faculty from 1981 to 1983.  In 1998, he was presidential election campaign manager for Henrique Salas Romer and now lives in retirement on the Caribbean island of Margarita where he runs a leading Hotel-Resort.  You may contact Gustavo Coronel at email ppcvicep@telcel.net.ve

abcnews.go.com — By Tom Ashby

LONDON (Reuters) - Oil prices pulled back from 29-month highs Wednesday in light profit-taking as the United States and Britain worked on a U.N. mandate for war on Iraq.

A cold blast in the world's biggest heating oil market in the U.S. Northeast also underpinned prices, which are just $4.50 shy of an all-time high set after Iraq invaded Kuwait in 1990.

International benchmark Brent crude oil fell 29 cents to $32.25 per barrel, just below a two-year high of $33.10 touched last week.

U.S. crude futures dipped 33 cents to $36.63 a barrel, off a peak of $37.05 reached Tuesday, its highest level since September 2000.

Dealers reported light profit-taking after a blistering oil price rally over the last three months which has added 50 percent to the cost of crude.

"The world is facing the prospect of losing Iraq's two million barrels per day of oil exports, and perhaps some of Kuwait's oil too, at a time when oil prices are already well above $30 per barrel and stocks are abnormally low," said the Center for Global Energy Studies in a monthly report.

President Bush shrugged off global anti-war demonstrations Tuesday, while Washington and London worked on a second United Nations resolution to sanction war if Iraq fails to disarm immediately.

The United States warned its reluctant ally Turkey that time was running out to agree on the deployment on its soil of an Iraq invasion force of U.S. troops as the two states wrangled over the size of a multi-billion-dollar aid package.

The Defense Department ordered another 28,000 troops to the Gulf region this week as it builds a force of more than 200,000 for a possible invasion of the Arab oil power.

Iraq is the world's eighth biggest oil exporter, selling roughly two million barrels per day (bpd) into the international market, and traders fear war could disrupt supplies from other producers in the Middle East, which supply 40 percent of world exports.

The White House has said a new proposal could be proposed this week to the U.N. Security Council, where Bush has met opposition from France, Russia and China, who want more time for weapons inspections to continue.

TIGHT SUPPLIES AS NIGERIA DOWNS TOOLS

Concerns over supply disruptions resulting from a war come at a time when strike-hit Venezuelan exports struggle to return to normal and oil workers in Nigeria downed tools, although supplies from Africa's top producer have remained normal so far.

Venezuela's oil exports were running at about 1.3 million bpd Tuesday, roughly 50 percent of normal levels, despite government efforts to restore production.

Venezuela accounted for 13 percent of U.S. oil imports before the strike, aimed at toppling President Hugo Chavez, and the stoppage has severely dented U.S. fuel stocks, which are running at historic lows.

Analysts expect another decline across the board in U.S. oil supplies as Arctic temperatures battered the Northeast region stepping up demand for winter heating fuel.

U.S. stocks of crude oil are already below 270 million barrels, seen as the minimum level required to keep the nation's refineries running normally.

Supplies could be tightened further if there is an escalation in a strike over pay and conditions by Nigerian oil workers, which began Saturday but has not touched exports so far.

Nigeria pumps just over two million bpd and is the world's seventh biggest exporter.

Union and government officials are due to meet Wednesday to try and resolve the dispute.

www.edinburghnews.com CITY VIEW Peter Clarke

THE world’s oil markets seem to be registering rather more than the normal fears about Iraq. The price of oil is staying solidly above $30 a barrel.

Venezuela is barely supplying its normal volume of oil. Nigeria’s two million barrels a day looks dodgy and the northern hemisphere is having a severe cold spell which has driven up fuel consumption more than had been anticipated.

The only tangible news that will relieve the market is if the US announces releases some of its strategic petroleum reserve.

The Americans have 600 million barrels lying around the country. Everyone had assumed they would not be opened until the day a strike was launched on Baghdad. At present prices, the gesture of opening a few barrels may become necessary.

In the meantime, a world market price of $32 a barrel makes many marginal fields suddenly profitable again. Techniques of extraction are now so much more sophisticated it is possible to suck oil out of fields which had previously been abandoned. At $32 a barrel, many North Sea oil fields look worth opening up again.

Once again markets far removed from Iraq depend on political or military events.

Electric avenue

There will be many unintended consequences of London’s experiment in road pricing.

It will be some weeks before we can see the full effects but one early initiative looks like a winner. The authorities in London have waived the £5 a day congestion charge for electric vehicles. Electric cars have failed to become fashionable because they struggle to go above 50mph but in urban landscapes where can you possibly achieve 50mph? Four miles an hour is often impressive.

Very quickly people will buy electric cars with a new enthusiasm and it already seems car hire firms in London are bringing in more electric vehicles.

If or when Edinburgh introduces a similar road pricing scheme all the arguments of ecological virtue lead towards a similar concession for free movement for electric cars.

The whole initiative of pricing this valuable asset of urban road space is going to reveal extraordinary new economic truths. Already civil engineers are arguing they could build underground roads to match the underground railways. We’re on the start of a large adventure.

Food for thought

NOT a single complaint has been made under the Supermarkets Code of Practice for their dealing with suppliers.

This investigation was meant to give flesh to Gordon Brown’s inchoate thoughts about "rip-off Britain". The Office of Fair Trading would like to have reprimanded the supermarkets for their purchasing habits but could find no one to offer a complaint of any nature.

Does this mean food suppliers are quite content with the supermarkets procurement policies? It’s just a possibility but the greater likelihood has to be that no one was going to murmur even the smallest peep of a complaint for fear of offending the companies on whom they depend.

Once again the OFT seems blind in one eye. The price of British groceries could tumble by 40 per cent, easily, if the restrictions of the Common Agricultural Policy were lifted or scrapped.

We do have a "rip-off Britain" but it is one at which the Government connives. It was only prudent of the OFT not to mention it yet again.

www.sun-sentinel.com By Ricardo Alonso-Zaldivar Los Angeles Times Staff Writer Posted February 19 2003

WASHINGTON -- Billions in taxpayer dollars and swarms of federal screeners have made U.S. airports harder for terrorists to hit, but passenger jets bound for America remain vulnerable overseas because of gaps in global security, industry and government officials say.

"There are hundreds and hundreds of examples of gaping holes in foreign security," said Capt. Steve Luckey, security chairman for the Air Line Pilots Assn. "There is nothing out there to negate a recurrence of 9/11, provided [terrorists] do it at the end of the flight instead of the beginning."

The concerns are intensifying as a possible war with Iraq looms closer. They increased earlier this month when the government, citing specific threats against U.S. targets here or overseas, elevated the nation's terrorism alert system to its second-highest level.

Perfunctory passenger screening at U.S. airports has been replaced by close inspection under the federal Transportation Security Administration. One unintended result may be to displace the threat, making it more tempting to attack American aviation at less secure airports overseas.

"It is much easier for terrorists to plan and to move around overseas," said Cathal Flynn, who headed the Federal Aviation Administration's security branch during much of the 1990s. "These guys will go wherever they see a weakness, so every place in the world has to be considered high threat."

Under international agreements, all nations must provide basic screening of passengers and luggage. In practice, there is no uniform level of security. European countries, Canada and Japan have beefed up airport security since the Sept. 11, 2001, attacks. Yet many poorer countries cannot afford to do it.

In Asia, Japan's added countermeasures are offset by spotty progress among Southeast Asian countries, said an airline pilot who is based in Southern California and regularly flies Pacific Rim routes.

"We do have a concern," the pilot said, speaking on condition of anonymity, "because it seems that Manila, Thailand, Kuala Lumpur -- those are some of the main route structures that all these terrorists use."

Such concerns are legitimate, said James Loy, who heads the U.S. Transportation Security Administration. "Security has become a new issue to be carried to the international organizations," Loy said in a recent interview. "We are trying to persuade other countries to become part of the solution."

One way to frustrate the government's $6.6-billion investment in protecting American air passengers is to strike beyond the reach of the U.S. security agency. An attack "is more likely to happen somewhere where TSA isn't located," said a Transportation Department official. "The challenge is keeping complacency from setting in."

The last known terrorist attempt against a U.S. airliner began on French soil. Richard Reid boarded a Paris-to-Miami flight on Dec. 22, 2001, waited until the plane was over the Atlantic, then tried to light explosives in his shoes. Last month, he was sentenced to three life terms.

The Reid incident brought a quick response in the United States as authorities deployed advanced equipment at airport checkpoints so screeners could test for explosives residue on passengers' shoes. But relatively few overseas airports have the $45,000 detection units, even though Reid's plot originated abroad.

"We need to get more equipment abroad to do screening," Flynn said. "We have deployed thousands of Trace detectors in the United States, but they have not been deployed to U.S. air carrier stations overseas, except in a few instances."

For travelers grown accustomed to stricter U.S. security, an encounter with lower standards overseas can be unsettling.

"There was no working metal detector, there was no working anything," said a California woman who flew back to Atlanta from Montego Bay, Jamaica, last month on Delta Airlines. "It was a mess. It was a horrible mess."

As she arrived to board Flight 682, the woman said security at the Jamaican airport appeared to simply break down. "It was packed with people, and there was no luggage moving through the X-ray monitors," said the woman, who asked not to be identified because of concerns for her job.

Jamaican security officials began to let passengers through, she said, although some were stopped at random and asked to open their bags for a visual check. If they refused, they were allowed to continue nonetheless.

"People were not screened, that was the thing that was so amazing to me," said the woman. "The plane was coming right into our borders, bringing passengers from God knows where, and they were not checked."

At U.S. airports, all passengers entering a departure concourse must pass through metal detectors and put their carry-on items through X-ray machines. If one person tries to circumvent a security checkpoint, it can lead to the whole terminal being emptied out or "dumped" for re-checking.

Delta Flight 682 arrived safely in Atlanta. "Nothing happened," said the woman who took the flight, "but the fact is there was every opportunity for something to happen."

Delta does not comment on security matters, said spokesman Anthony Black. "We don't control security in Montego Bay," he added.

In another example of apparent lax security abroad, British authorities last week detained a 37-year-old Venezuelan man at Gatwick Airport in London after finding a grenade in his baggage upon his arrival on a British Airways flight from Caracas, Venezuela.

The man, who identified himself as Hasil Mohammed Rahaham-Alan, was charged with possession of an explosive, possession of an article for terrorist purposes and carrying a dangerous item on a flight. He remains in custody.

Gatwick's north terminal was closed for hours after the grenade was found, and flights at the terminal were suspended until police determined there was no further threat.

For terrorists who operate globally, many countries can be used as staging areas for an attack. "Although the Caribbean is not a high-risk place historically from a terrorist perspective, it doesn't have a lot of good security and it is close to home," said Luckey, the pilots union official.

U.S. airlines could copy El Al's strategy and provide their own security abroad, said Flynn, the former FAA security chief. In Los Angeles on July 4, it was El Al security agents who tackled and shot an Egyptian immigrant who opened fire on the airline's ticket counter, killing two people before he was fatally wounded.

American carriers do have additional security of their own, say industry officials, especially on the busiest international routes. At some airports, the airlines employ their own guards to check passengers after they clear local security. But the financially struggling airlines cannot afford to deliver a consistently high level of protection at all departure points.

Among the standard precautions that U.S. carriers provide are reinforced cockpit doors and checks to ensure that no luggage is loaded into the cargo hold unless the passenger has also boarded the flight. Names of international passengers are screened against "watch lists" of people with terrorist links.

If war breaks out, many Americans are likely to stay home. During the 1991 Persian Gulf War, travel to Europe and Asia plunged. International bookings fell for the first time since the end of World War II.

International standards for airport security are set by a U.N. agency, the Montreal-based International Civil Aviation Organization. With 188 members, it includes every nation in the world. The organization is well aware that the territory of any of its members could become the gateway for an attack.

"Like a chain, the aviation system is only as strong as its weakest link," organization President Assad Kotaite wrote this month in an industry publication. "A potential perpetrator will always try to exploit that weakest link, [although] his target may be halfway around the world."

But compliance with international security standards is entirely voluntary.

"What we do is bring all the member countries together and design security programs," spokesman Denis Chagnon said. "We don't track them, so I really can't comment on the level of security in any one country."

Such international agreements "aren't worth the paper they're written on," Luckey said. "There has to be some vehicle to back up the intent. If some countries can't afford to buy the technology, then we have to look at how much we can afford to subsidize foreign countries."

In the past, the FAA inspected high-risk foreign airports, a responsibility that now rests with the new U.S. security agency. The U.S. has several ways to pressure foreign governments, from publicizing their security problems to banning flights by American carriers to problem airports.

Loy said his power to influence his overseas counterparts is limited. "This is not our national turf," he said. But Flynn said the Transportation Security Administration has to begin to broaden its focus beyond the 429 commercial airports in the U.S. "There is a huge American responsibility here," he said. "The turf of other countries should have nothing to do with it if there is any concern about the security of flights."