Adamant: Hardest metal
Tuesday, February 25, 2003

Oil bounces back on NY fuel barge blast

www.dailyexpress.com.my 23 February, 2003

NEW YORK: Oil prices rebounded toward two-year highs on Friday as a fuel barge exploded at an oil terminal in New York, briefly sparking terrorism fears.

The blast in the Arthur Kill waterway between Staten Island and New Jersey sent prices on the nearby New York Mercantile Exchange (NYMEX) soaring before law enforcement officials said it was an accident.

The U.S. government has already put the country on the second-highest level of terror threat alert, warning that energy facilities might be targeted.

U.S. crude for delivery in April climbed 84 cents to $35.58, up more than 40 percent since mid-November. International benchmark Brent crude oil rose 71 cents to $32.28 a barrel, versus a two-year high of $33.10 hit last week.

“There is nothing like a big bang to wake up the market, but it seems it was not a terrorist attack so things cooled off again,” said Christopher Bellew of brokers Prudential-Bache International.

Prices were strengthening even before the explosion as the United States said it had massed enough troops in the Gulf to attack Iraq, the world’s eighth-largest oil exporter. “The underlying strength still comes from Iraq, where there is every prospect of war,” Bellew added.

U.S. Defense Secretary Donald Rumsfeld said more than 150,000 troops were ready to move on Baghdad, while Turkey and the United States moved closer to a deal on deploying tens of thousands of troops on Turkish soil.

Washington plans to propose a new resolution to the United Nations Security Council next week authorizing a strike against Baghdad.

The United States, backed by ally Britain, is likely to face strong opposition from France, Russia and China, who want U.N. arms inspectors to be given more time to search for Iraq’s alleged stockpiles of biological, chemical and nuclear weapons. Baghdad denies it has such weapons.

“Oil prices are unlikely to shift too far away from a continuing upward bias until the situation with respect to Iraq moves to a more decisive phase,” said Paul Horsnell of investment bank J.P. Morgan.

The global oil market had slipped on Thursday on U.S. data showing an unexpected recovery in U.S. commercial crude oil stocks from their lowest levels in 27 years.

But commercial U.S. stocks of heating oil are running at almost 31 percent below last year, latest official data shows.

Blistering cold weather in the northeastern United States has also boosted demand for heating oil in a world market that is otherwise suffering from slow growth.

Inventories have also been crimped by a cut in supplies from Venezuela, which is struggling to restore normal exports after 11 weeks of strike by key oil company employees.

Venezuela, the world’s fifth-largest exporter before the strike, is now pumping at about half its normal rate of 3 million barrels per day. -Reuters

Venezuela PdVSA Fires 1,088 Workers;Total Now At 15,636

sg.biz.yahoo.com Monday February 24, 9:47 PM

CARACAS (Dow Jones)--A total of 15,636 employees at Venezuela's state-owned oil monopoly Petroleos de Venezuela (E.PVZ) have been fired in the aftermath of a strike which started Dec. 2 last year, a company official said.

"Yes, we have dismissed an additional 1,088 employees in the eastern part of the country," said Mario Socorro, a spokesman of the PdVSA division in east Venezuela. The dismissals now total around 40% of the workforce that was employed before the strike started. However, the total figure varies somewhat. The local daily El Universal maintains the dismissals now stand at 16,036 while PdVSA couldn't provide a definite list.

Some 35,000 oil workers at PdVSA joined a nationwide strike Dec. 2 last year that was aimed at the resignation of President Hugo Chavez. The strike severely crippled exports and production which stood at a level of around 3 million b/d by the end of November.

Crude production at PdVSA currently stands at 2.02 million barrels per day, the company president said Sunday. "We are now at the production level of 2.02 million barrels and by the end of next week it will be 2.5 million barrels per day," Ali Rodriguez said. However, fired staff of PdVSA claim production is much lower and stands at around 1.4 million b/d while exports stand at 1 million b/d. Rodriguez didn't give any new export numbers.

Chavez, discussing production levels at his televised Sunday show "Hello President" said he expects the Organization of Petroleum Exporting Countries, or OPEC, not to have any problems that Venezuela would "progressively put crude stocks on the market that haven't been used," he said, without elaborating further.

Last year, Venezuela exceeded its official output target of 2.5 million b/d by around 400,000 b/d when it drew from crude inventories that are located in the Caribbean. Venezuela's OPEC quota - at least on paper - is 2.819 million b/d.

Venezuela's request comes as the company struggles to go beyond the 2 million b/d production level. After focusing on easy oil fields that don't require much added pressure to get the oil flowing, PdVSA faces difficulties as mature oil fields are more labor and capital intensive and take more time to pump oil. Experts have said they doubt PdVSA would reach 2.5 million b/d any time soon due to a lack of financial and human resources.

However, on Sunday a local newspaper reported PdVSA plans to lift the force majeure on its operations in the coming days as the situation at the company is almost back to normal.

A declaration of force majeure three days after the nationwide strike started Dec. 2 temporarily released the company and its clients from contractual obligations.

-By Fred Pals, Dow Jones Newswires; 58414-2887461; fred.pals@dowjones.com

Business Slowdown Hits Latin America Server Market

www.serverworldmagazine.com

Following a tough year throughout the region, the Latin America server market suffered declines in shipments and revenue in 2002, according to Dataquest, a unit of Gartner Inc. Server shipments in Latin America declined 15.6 percent in 2002, while server revenue dropped 19.2 percent from 2001.

"While mostly large corporations are keeping up with their IT purchasing plans, medium and small-sized businesses are strongly affected by the contraction of the economies," said Lillian Alvarado, senior industry analyst covering servers for Gartner Dataquest's Computing Platforms Latin America group.

Hewlett-Packard maintained the No. 1 position in server shipments, despite a 23.6 percent decline in shipments. Dell experienced the strongest growth rate in server shipments, as it grew 29.5 percent in 2002. Dell had strong growth in every country in the region, and increased its penetration in all segments of the market, including small business and government.

Argentina experienced a tremendous decline in shipments of 76.8 percent and 66.8 percent in revenue due to the financial crisis from which it is still suffering. Brazil also suffered negative growth in shipments and revenue as elections created wide speculation, which reflected on the volatility of the exchange rate toward the end of the year, making purchases of imported equipment more expensive. Conditions in Venezuela also deteriorated during the fourth quarter of 2002, as social unrest virtually paralyzed the country affecting shipments and revenue.

Reports can be accessed on the Internet at www.gartner.com.

The Monitor (Kampala)

allafrica.com February 21, 2003 Posted to the web February 24, 2003 Charles Odoi Kampala

The price for petroleum hit the Shs 1,700 mark yesterday when oil companies raised the pump prices by Shs 70.

Diesel rose from Shs 1,380 to Shs1,450 and Kerosene was raised by Shs 50 from Shs 1,230.

This is the third time since the beginning of the year that fuel prices are rising.

Yesterday's price hike was attributed to the sharp increase of crude oil prices as the possibility of a US led attack on Iraq looms.

Oil strikes in Venezuela and Nigeria are also to blame.

Brent Crude Oil prices now stand at $32 a barrel just below a two year high it had reached of $33.10 last week.

"The price change came as a result of the rise in crude oil acquisition price on the World market which has risen by over 15% since January," Caltex Brand and Marketing Manager Edwin Kugonza said in a press release.

The statement said that Caltex increased the pump prices by 4% and will absorb the biggest portion of the 15% rise in crude oil prices.

In an interview yesterday, Total Managing Director Leopold Tzeuton said the value of the shilling to the dollar also played a big role.

"The increasing price of crude oil on the international market due to certain world events and the persistent increase in the foreign exchange rates have a big impact on fuel prices here," Mr. Tzeuton said.

"We are directly affected by the world market. We merely follow it and do not control it," he added.

Mr Tzeuton admitted the price hike could affect consumption but said that Total takes into consideration the purchasing power of ordinary Ugandans before making decisions.

"Total controls the way it increases prices. If we followed the market blindly, fuel prices would be much higher," he said.

But officials from the three major fuel companies; Shell, Total and Caltex said the oil shortage the Mombasa oil refinery faced early in the year and the break down of the Kisumu-Eldoret pipeline last month have nothing to do with yesterday's increase.

"Certainly not," Shell's Public Relations Officer Fred Massadde said.

NYMEX oil seen up amid wrangling on Iraq, cold

www.forbes.com Reuters, 02.24.03, 9:35 AM ET

NEW YORK, Feb 24 (Reuters) - NYMEX crude oil futures are expected to rise on Monday as the market awaits a new U.S.-British resolution on Iraq to be sent to the United Nations in advance of a possible U.S.-led attack. "Waiting for war," said a New York trader. More cold weather in the United States also should keep products supportive, traders said. NYMEX April crude was called to open 20 cents to 30 cents higher after ending overnight ACCESS trading up 29 cents at $35.87 a barrel, trading $35.47 to $36.04. In London at 9:30 a.m. (1430 GMT), April Brent crude traded 25 cents higher at $32.52 a barrel. The United States and Britain want a U.N. decision on Iraq within about two weeks of submitting a new resolution to the Security Council early this week, British Foreign Secretary Jack Straw said on Monday. The new resolution, setting the stage for war in Iraq by declaring Baghdad in violation of U.N. demands will be introduced Monday, according to Security Council diplomats. Britain's U.N. ambassador, Sir Jeremy Greenstock, intends to introduce the resolution, which a spokesman for British Prime Minister Tony Blair hoped would be voted on by mid-March. 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. Technical analysts on Monday were expecting NYMEX crude oil futures to extend higher in the open outcry session after strong gains on products futures in ACCESS trade. 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. Analysts said Friday's break and close above resistance in the $35.50 a barrel region and subsequent gains above $36 for the April contract had rekindled waning bull momentum. The focus now should be on closing the gap down from $36.10 on the continuation chart left from the March contract expiration. The surge in products prices in reaction to Friday's barge blast showed the skittish nature of the present trading climate. "This is a very nervous market, and traders were already looking to buy ahead of colder weather over the weekend," said Cameron Hanover's Peter Beutel. "News of a fire, explosion was more than the market could bear." 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. "I can confirm we are in the middle of a planned maintenance, which started last Saturday," a company spokeswoman said. The company declined to cite the capacities of the refinery's units or specify which unit or units were down. U.S. products inventories have been depleted because of cold weather, especially in the U.S. Northeast heating oil-consuming region, and by the strike curbed supply flow from OPEC member Venezuela. OPEC President Abdullah al-Attiyah said on Monday the cartel's producers had another three to four 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. More below-normal cold weather is forecast for this week in much of the United States, according to forecasters at Meteorlogix. NYMEX March heating oil was called 1.50 cents to 1.75 cents higher after ending ACCESS trade up 1.80 cents at $1.1265 a gallon, the overnight high. Nearby technical resistance is expected at $1.1350, just below the overnight high of $1.1290 cents. Support is due at $1.06. NYMEX March gasoline was called to open 0.75 cent to 0.80 cent higher after ending overnight trade up 0.82 cent at $1.0210 cents a gallon. Resistance is expected at $1.0360. Support is expected at $1.00.