sg.biz.yahoo.com Tuesday February 25, 12:17 AM By David Gautier-Villars Of DOW JONES NEWSWIRES

PARIS (Dow Jones)--Of all the weapons that may be deployed in an Iraqi conflict, Klaus-Dietmar Jacoby has the one that will be the least noticed if used successfully.

In a drawer in his Paris office sits a brown plastic notebook containing hundreds of names and numbers of staff at refineries, oil terminals and governments around the world.

If a war in Iraq blows a hole in the world's supply of crude oil, Jacoby, the head of emergency planning at the International Energy Agency, will turn to his notebook to help keep disruption to a minimum.

His job is to gauge where the shortfall will hit hardest. Based on information from Jacoby, the IEA, the watchdog of the strategic oil stockpile for the 26 oil-thirsty members of the Organization of Economic Cooperation and Development, would then decide whether to intervene by releasing reserves.

"We are ready," Jacoby says in his office overlooking the Eiffel Tower. "We've simplified our emergency procedures and if there is a serious supply shortage, we could intervene within 48 hours, even faster if needed."

That's swift compared to 1974, when the IEA was created as a counterweight to the Organization of the Petroleum Exporting Countries. Back then, weeks or even months were thought necessary to act.

In those days, the agency's main weapon against a supply disruption was an intricate reallocation system under which the IEA attempted to spread the pain. The agency would solicit help from private companies and governments for members most affected by a shortage of oil.

If no one volunteered, the IEA would enforce a mandatory sharing system.

"That was bloody complicated," says Nick Tydd, who represents BP PLC (BP) on the IEA's Industry Advisory Board. "And it soon became clear that circumstances had changed significantly since the early days of the IEA and the market would now share the oil far more quickly and more efficiently than any mechanical allocation system."

To keep pace, the IEA introduced a mechanism in 1984 to make oil available to the market more efficiently.

Instead of itself trying to match users and suppliers, it signals where oil is available. If it so chooses, the agency can require members to make part of their oil reserves - equivalent to at least 90 days of net imports - available to the market.

The IEA used the mechanism, rather than the older reallocation system, during the Gulf War in January 1991, the only time it intervened in the market. The move released 2.5 million barrels of oil a day for 30 days.

The move cooled prices and only some of the oil reserves were actually needed, but traders still criticized the agency for taking six months to release stocks, long after Iraq had invaded Kuwait.

Jacoby, who wasn't in his job at the time, says the IEA was right to avoid a knee-jerk reaction. "We couldn't anticipate how long the war would last," he says. "The oil reserves are stored as a last resort, like emergency rations."

BP's Tydd says the agency's mistake was that it failed to communicate enough with the world. "It's important to have a contingency plan in place, but it's even more important to make sure people are aware of it."

Jacoby reckons the oil markets' difficulty was in predicting how the IEA would react to a crisis. In response, the agency has simplified its procedures and improved its visibility, he says.

A year ago, the agency locked 100 oil experts in a room in Paris for a dummy run to test its ability to coordinate with the industry and swiftly release oil reserves. Oil executives, civil servants and traders reacted to a hypothetical major supply disruption after anthrax had been detected at Ras Tanura, the world's largest oil terminal in Saudi Arabia.

Industry participants said the trial helped them understand how the IEA works.

To become more transparent, the IEA provided details last year on the volume of oil it can easily inject into the market. In the event of a supply outage, the agency could draw down its reserves at a maximum rate of 12.9 million barrels a day for a month.

The rate would fall progressively and member governments' reserves would be almost exhausted after eight months.

That figure should more than offset the sudden loss of Iraqi's average daily exports of around 1.8 million barrels, but the oil markets remain jittery.

"It's reassuring to hear the IEA saying it can cope with a crisis," says Regis Collieux, a senior oil expert at BNP Paribas' energy and commodities arm. "But one cannot rule out a malfunction in the system or a mismanagement problem."

Collieux says he is concerned that OPEC countries, excluding Iraq and Venezuela, only have the capacity to add 2.3 million barrels a day to the market.

"If there was another crisis on top of Iraq, we would be testing the limits of the system," he says. "The ice would be very thin."

-By David Gauthier-Villars, Dow Jones Newswires; 33 (0)1 40 1717 40; david.gauthier-villars@dowjones.com

www.vheadline.com Posted: Monday, February 24, 2003 By: Patrick J. O'Donoghue

Opposition Coordinadora Democratica (CD) politician Jesus Torrealba says the CD will ask the National Assembly (AN) to open an investigation into the dismantling of Petroleos de Venezuela (PDVSA) and will hire undisclosed international energy agencies “to study the direct relationship between the political interests of some Arab administrations linked to international terrorism and the process of corporative genocide that (President) Chavez Frias is promoting against the Venezuelan oil company.”

Torrealba claims that Chavez Frias is hell bent on ruining national interest and wants to place in the hands of his terrorist allies greater control of the oil market to use as a political tool against the West.”

Torrealba recalls the links of friendships between Chavez Frias and terrorist governments, such as those of Saddam Hussein and Ghaddafi.

www.vheadline.com Posted: Monday, February 24, 2003 By: Patrick J. O'Donoghue

Venezuela’s star basketball player, Carl Herrera has signed a contract to play for Saudi Arabian team Nadi Al Hilal … “I’m waiting for them to send the plane ticket.”

Herrera (36) says he’s guaranteed 2 months salary and so he would be willing to return to play for the Saudi team for $150,000.

The veteran basketball star will also consider two other options when the Saudi league ends: join the Puerto Rico league or play for Isla de Margarita’s Guaiqueries team.

Herrera, who won two rings in his 8-season stint with the Houston Rockets, says he will take a decision in two months time but he wants to continue playing to be in top form for the upcoming Pan American Olympics, South American championship and Americas tournament in which he will play for Venezuela.

wcco.com CBS Feb 24, 2003 11:51 am US/Central (CBS) (NEW YORK) Two senators have asked the Federal Trade Commission to monitor the gasoline market and investigate any possible anti-competitive activity, as a national survey showed gas prices continuing to rise. An industry analyst said Sunday that gas prices increased 7 cents per gallon over the past two weeks, pushing pump prices to near record levels. "The causes of the price increases are not entirely clear, but it is critically important to ensure that they are not caused by price-fixing or price gouging by oil companies, gas stations, or others within the gasoline supply chain," Sens. Herb Kohl, D-Wis., and Mike DeWine, R-Ohio, wrote the FTC. But the national survey indicated the upward pressure on prices might be easing. The average weighted price for gas nationwide, including all grades and taxes, was approximately $1.70 per gallon Friday, according to the Lundberg Survey of 8,000 stations nationwide. That price is within 7 cents of $1.77, the all-time high recorded by the survey on May 18, 2001. Gasoline cost about $1.63 a gallon on Feb. 7, the date of the last Lundberg Survey, an increase of 11 cents over the previous two-week survey. "The pace of gas prices has already slowed," Trilby Lundberg said. "The other indicators show a possible decrease in prices." Increased production in Venezuela as a strike there eases, the approach of warmer weather, and the reopening of various U.S. refineries that had been idled for annual maintenance should help slow or end the price spiral, Lundberg said. Crude oil prices are also up due to fears of a war with Iraq, but if the U.S. goes to war, or if the crisis is resolved, that oil bubble could burst. Prices rose 30 cents a gallon in 1990 after Iraq invaded Kuwait, and then dropped 30 cents in 1991 following the Persian Gulf War, Lundberg said. The national weighted average price of gasoline, including taxes, at self-serve pumps Friday was about $1.67 per gallon for regular, $1.76 for mid-grade and $1.85 for premium. CBS News Correspondent Sandra Hughes has reported that, if adjusted for inflation, gas prices are still lower than they were in the 1970's. The Lundberg survey did not reflect what effect, if any, Friday's massive explosion at a fuel storage facility in Staten Island, New York would have on fuel prices. The blast — on a barge stocked with 100,000 barrels of unleaded gasoline near a storage facility that holds 2 million barrels of oil products — pushed crude oil prices up more than a dollar in trading Friday. Heating oil and gasoline futures also surged. Prices eased somewhat after analysts and traders realized the loss of gas supplies would pose only a short-term problem for the Northeast. The United States uses about 13 million barrels of oil a day. Making their case for an FTC probe, Kohl and DeWine cited examples like a recent spike in gas prices at Akron, Ohio filling stations from $1.53 a gallon to $1.74 a gallon, in what the senators claimed was a matter of hours. The Federal Trade Commission last probed gasoline pricing practices during a sharp rise in fuel costs during the summer of 2000. The following March, the commission reported that it had found "no credible evidence of collusion or other anticompetitive conduct by the oil industry." However, the FTC did find that the price rises were due, in part, to factors controlled by the fuel companies.

www.forbes.com Reuters, 02.24.03, 12:34 PM ET

NEW YORK, Feb 24 (Reuters) - NYMEX crude oil futures extended early gains at midday on Monday as the United States and Britain vowed to push a new U.N. resolution that could set the stage for war against Iraq. Heating oil futures, which hit a fresh all-time high on forecasts of colder U.S. weather amid thin supplies, remained supportive. News that strike-hit Venezuela had partially lifted a force majeure for exports of some grades of crude oil had little impact on the morning trade. "Venezuela's government promised before that it would lift its force majeure totally at this time...so this partial lifting has little effect on the market," said Phil Flynn, market analyst at Alaron Trading in Chicago. At 12:30 EST (1730 GMT), NYMEX April crude was up 77 cents at $36.35 a barrel, trading $35.80 to $36.38. In London, April Brent crude traded 66 cents higher at $32.93 a barrel. On Monday, the United States said it expected U.N. action in "short order" on a new U.S.-British resolution on Iraq, which analysts say could pave the way for a possible U.S.-led attack against Baghdad. Both the United States and Britain want the U.N. Security Council to act on the resolution in about two weeks. White House spokesman Ari Fleischer told reporters early on Monday that the new resolution will be introduced this afternoon. Britain's U.N. ambassador, Sir Jeremy Greenstock, intends to present the resolution. Getting approval will be difficult in face of opposition from France, Russia and China, who have veto power on the 15-member council. Among the other members only Spain and Bulgaria support the United States and Britain, while the other nations either lean toward France or are undecided. To pass, the resolution needs nine votes, and no vetoes. Chief U.N. arms inspector Hans Blix that he does not expect any more talks with Iraq over the destruction of the al-Samoud 2 missiles which were found to exceed the range set by the world body after the end of the Gulf War in 1991. Blix has ordered Saddam to start destroying the missiles by Saturday. NYMEX March heating oil was at $1.1445 a gallon, up 3.60 cents, after surging earlier to a fresh all-time high of $1.1525 a gallon. It surpassed the previous record of $1.15 struck on Dec. 3, 1979, a year after NYMEX launched heating oil futures. Recent large draws in U.S. distillate stocks, including heating oil, have been prompted by a lengthy stretch of severe winter weather in the U.S. Northeast, the biggest regional consumer of heating oil in the world. Supply tightened after an oil strike began Dec. 2 in Venezuela, which before then supplied the U.S. with about 13 percent of its crude and refined product imports. The five-day outlook of private forecaster Meteorlogix beginning Monday calls for temperatures to be as much as 12 degrees Fahrenheit below normal in the region. There is a chance of light snow in the southern part of the region late Thursday and Friday, it said, just as the area is still reeling from last week's worst snowstorm in seven years. The six- to 10-day outlook after that calls for temperatures to be near to below normal, Meteorlogix said. The NYMEX oil complex ended sharply higher on Friday as traders, already edgy over a looming war with Iraq, were jolted by news of a gasoline barge explosion at an oil terminal on Staten Island, one of New York City's five boroughs. Exxon Mobil Corp. (nyse: XOM - news - people) said on Friday units at its 516,500 barrels per day (bpd) refinery in Baytown, Texas, were in planned maintenance, but would offer no further details. Meanwhile, OPEC President Abdullah al-Attiyah said Monday the cartel's producers had another 3 million to 4 million barrels a day of spare capacity to call on should war stop Iraqi exports. The figure is much higher than most independent estimates of spare capacity. NYMEX March gasoline was up 1.62 cents at $1.029 a gallon, moving from $1.022 to $1.037.