townsvillebulletin.news.com.au 25feb03

WORLD oil prices have raced higher as the United States and its allies submitted a draft UN resolution pushing for military action to disarm Iraq. Icy temperatures in the United States and low world fuel supplies also pushed prices higher.

"There is a confluence of a lot of events that don't point to lower prices," Mike Fitzpatrick, market analyst at the Fimat brokerage house, said.

"There is the urgency of the war, the cold persists and the world inventories are still low."

New York's benchmark light sweet crude for April delivery shot up US90c to $US36.48 a barrel.

In London, the price of benchmark Brent North Sea crude oil for April delivery surged US91c to $US33.18.

Oil prices rose as US moves to disarm Iraq by force entered the final phase.

The United States, Britain and Spain submitted a draft resolution stating Iraq had failed to rid itself of weapons of mass destruction and calling on the United Nations Security Council to take action.

The US-British draft said Iraq had not co-operated fully with disarmament inspections as required under UN resolution 1441, passed on November 8.

The resolution, which will face stiff French-led opposition in the council, says the council "decides that Iraq has failed to take the final opportunity afforded to it in resolution 1441".

President George W Bush pressed for action.

"Is it going to be a body that means what it says? We certainly hope it does," Bush said.

"But one way or the other, Saddam Hussein, for the sake of peace, and for the security of the American people, will be disarmed," he said.

France put a counter-proposal to the Security Council today calling for strengthened inspections of Iraq's arsenal. Russia and Germany were co-signers of the memorandum, which does not need a vote, while China backed the proposal.

Cold weather in the United States further supported oil prices.

"Apart from the continued Iraqi uncertainty, a lot of bad weather is expected again in the States, meaning more demand, which has pushed product and crude oil prices up," said Ed and F Man trader Graham Flint in London.

Traders said a strike in Venezuela's oil industry was still propping up prices, although export shipments recovered partially.

The head of Venezuela's state-run oil company PDVSA, Ali Rodriguez, said Venezuela was now producing 2.06 million barrels of oil a day, which it hoped to boost to 2.5 million this week.

GNI-Man Financial analyst Lawrence Eagles said the Venezuelan opposition had on Friday estimated Venezuelan output at 1.515 million barrels per day.

"Whatever the actual level of output, it is clear that output and shipments are increasing, and this should ease the pressure on the world market if there is a war with Iraq," he said in London.

The slew of political and market concerns outweighed a statement from Iran that the Organisation of Petroleum Exporting Countries (OPEC) should avoid cutting production at its next meeting on March 11.

Asked about the possibility of an output cut from the present level of 24.5 million barrels a day, Iranian Oil Minister Bijan Namdar Zangeneh said: "I don't think so. The current situation in the region is abnormal both from a political and military point of view."

www.bayarea.com Posted on Mon, Feb. 24, 2003 BY ANTHONY MCCARRON New York Daily News

TAMPA, Fla. - (KRT) - They were happy days for Juan Rivera. From his home across the street, he would peer into the Stadia Nicolas Leon where the ballplayers were practicing. Eagerly, he'd run inside and try to join them, even if it meant a few hours of shagging baseballs or throwing batting practice before he got a chance to hit.

Several Venezuelan stars were always there - Ozzie Guillen, Richard Hidalgo, Henry Blanco. They were older than the 15-year-old Rivera. Some, like Guillen, were established major leaguers. Others, like Hidalgo, were playing in the minors.

"Sometimes," Rivera said through an interpreter, "they didn't let me hit.

"But that was all right," he added, smiling.

Growing up in Guarenas, Venezuela, everyone played baseball, so Rivera fell in love with the game when he was 5 years old. As a skinny 15-year-old, he knew he wanted to join Venezuelans like Luis Sojo in the majors.

Last year, Rivera, 24, made a significant contribution to the Yankees and started all four of their playoff games in left field. Joe Torre was impressed with Rivera's self-assured manner and grit in returning after a bizarre June injury that left him with a broken kneecap just when he was starting to get comfortable in the Bronx.

But now Rivera's big-league hopes are stalled because of the Yankees' clogged outfield. They signed Japanese star Hideki Matsui to a three-year, $21 million contract over the winter, blocking left field, and have so far been unable to move trade bait Raul Mondesi, who will start in right, or Rondell White.

So unless there is an injury or a trade, Rivera will begin the season at Triple-A Columbus. "That's probably what would be best for him," Torre said. "But we'll let the spring play out. We certainly don't want him to be a bench player. He needs at-bats more than he needs to be here.

"If he were here right now, the way things are configured, he'd sit."

Rivera chuckled softly when asked what he thought his role could be this season. He said the way last year ended - he made four starts and had three RBI in the playoffs - gave him "a lot of energy and excitement.

"But then they signed Matsui. I don't know what will happen. The game's a business, but I hope to always be with the Yankees."

Rivera agreed with Torre that it would be better for him to play regularly in the minors than languish on the bench in New York. "Of course I want to be in the major leagues, but I want to be there playing," he said.

Even Rivera's strong showing yesterday in the Yanks' first intrasquad game won't go far in swaying Yankee brass to keep him instead of Chris Latham as a spare outfielder. Rivera hit an opposite-field drive that hit the right-field foul pole. It wound up a two-run triple, though, because umps ruled the ball was in play.

Latham, whom the Yankees signed to a one-year, $400,000 contract over the winter, is the kind of speedy outfielder that Torre likes to have on his bench as a pinch-runner.

But Rivera remains an integral part of Yankee plans, a solid, young outfielder who could keep the soaring payroll down at one position and develop into a homegrown star.

Rivera batted .265 with one homer and six RBI in 28 games last season for the Yanks after hitting .325 at Columbus. He missed more than two months after the freak accident during batting practice when he was doing an outfield drill and ran into a maintenance cart, fracturing his right kneecap.

He proved his toughness again over the winter when he had emergency surgery to have his appendix taken out Jan. 1 and was ready to work out three days later. He reported early to camp as a rehab player, eager to prove he was healthy and improved.

"He showed me last year he plays with a certain calmness about him," Torre said. "And in the postseason, I saw a calmness that I didn't expect from a young player.

"He's a big leaguer, it's just a matter of when it happens."

www.thecarconnection.com by Bengt Halvorson       2/25/2003

Have you noticed the buzz? People are talking, with sudden urgency, about how quickly gasoline prices have risen in the past few weeks, wondering what’s going to happen when military action in the Middle East. Politicians are questioning the honesty of the industry. And yes, some of those behind the wheel of gas-guzzling SUVs are probably reconsidering whether they’re willing to dig deep into their wallets to fund the daily commute.

The media — and those familiar with the industry — are blaming a combination of factors, including a prolonged rise in the price of crude oil, the potential war in the Middle East, the unstable political situation in Venezuela (a significant supplier to the U.S.) and the corresponding petroleum-industry strike, terrorism scares, several recent refinery incidents, and an unusually rough season of winter storms that have snagged normal transportation systems.

But there have also been rampant accusations of price gouging at the pump. Nearly two weeks ago, the American Automobile Association’s Washington, D.C., office issued a release that essentially “…reminded the petroleum companies that there is a law regarding profiteering during national emergencies,” according to an AAA official. Thus far, there have been no emergencies declared, but the statement served as a reminder that there are many organizations monitoring the industry for misbehavior.

Then last week, an outraged Senator Charles Schumer (D.-N.Y.), spoke out to Capitol Hill about skyrocketing gas prices and accused the industry of “…trying to make a quick buck” from consumers’ uncertainty over the situation in the Middle East. Schumer called for a Federal Trade Commission investigation into the price situation.

Crude oil pricing

Consumers and politicians are anxious to pin the blame on a particular group, but there is no single clear culprit. A petroleum industry observer opined that crude oil prices have been climbing for months (up 19 percent, to $36.79 per barrel just since the beginning of the year) without a significant change at the pump, and it was only a matter of time before gas prices would spike. But the price of crude is only part of the cost of a gallon of gas, and changes in retail lag those of crude by weeks or months — for the later part of 2002, crude prices were rising while pump prices were still falling slightly.

But with increased public anxiety over a U.S. military action in Iraq and potential retaliatory terror attacks, are retailers unfairly exploiting the situation?

Retailers quickly point fingers back up the supply chain, insisting that they are maintaining the same cents-per-gallon profit margins as usual, and only boosting the price in relation to the rising cost from refiners. Distributors, retailers, and marketers only see about thirteen cents per gallon sold. They insist that prices are not inflated, though a panic-buying spree at the pumps will exaggerate the price swing.

“If consumers rush out and fill everything they have, it actually makes the situation worse,” said Steve O’Toole, executive director of the Oregon Petroleum Marketers Association.

“Don’t start panic buying, because that will just cause panic pricing…and vice versa,” agreed Elliot Eki, an AAA spokesman.

Nationally, this past Friday, the average retail price of regular unleaded was at $1.665 per gallon, up more than 22 cents since the beginning of the year. Left coasters are getting hit the hardest, with the West Coast states seeing prices rise about 40 cents per gallon in the past five weeks and already up to 70 cents above year-ago levels. Regional distributors attribute this largely due to the fact that there are few petroleum refineries, and that petroleum distribution relies more heavily on trucks. San Francisco area pump prices ranked highest in the U.S. as of February 21, according to the AAA, with the average price per gallon of regular unleaded being nearly $2.10 (nearly $2.27 for premium) as of Feb. 21. Meanwhile, average prices in Southern California, Oregon, Washington, and Alaska inched up toward the $2 mark, with many stations charging significantly higher.

Prices remained lowest in the central states, those with low gas taxes, and those near major oil refineries. Oklahoma’s average price was about $1.55, and Georgia was possibly the lowest, at $1.527 per gallon, on average, according to the AAA’s weekly survey of pump prices. In the Atlanta metro area, for example, prices still hover around $1.45 for regular unleaded.

Tips for saving gas

As the price of crude oil has continued to rise, it’s expected that pump prices will gradually climb higher—though not as abruptly as in the past several weeks. It may be a while before prices settle back to where they were just a month ago.

Until then, here are some straightforward ways to help ease the strain on your wallet:

Keep the gas guzzlers in the garage! Super-sized SUV use about three times the gas of a compact sedan—to go the same distance! If you’re not really going to use the space, then why don’t you park the SUV in the garage, take out the city car, and save some money?

Combine trips. Do you need to run a particular errand at the moment, or can you wait and combine it with another trip? If you combine tasks, you’re likely to save time, mileage, and money.

Keep the tires properly inflated. Driving with your tires underinflated is not only dangerous — you also use up to ten percent more fuel. Check tire pressures weekly, or whenever you fill your gas tank. Keep in mind that the pressures given in your owner’s manual or doorsill will be for when the tires are cold: If you’ve just been driving, add 3-4 psi.

Keep your vehicle in tune. If your vehicle is overdue for its periodic service, now’s the time to have it done. Simple routine maintenance items like replacing the fuel and air filters, maintaining the ignition system, and changing the oil can make sure your vehicle is getting its best mileage. Check your owner’s manual for more service/replacement intervals.

Maintain steady speeds whenever possible Avoid quick starts. Accelerate moderately to your desired cruising speed and maintain it, using the cruise control for long distances where traffic isn’t an issue. In traffic, try to anticipate the vehicles ahead so you don’t have to vary your speed as much.

Obey speed limits! Most cars use much more fuel at 80 mph than at 60 or even 70. Keep to the speed limit, and you’ll probably notice a difference in your pump budget. And since traffic’s usually the real issue, chances are you’ll get there almost as quickly, too.

Turn off the A/C at low speeds. Air conditioning systems demand a significant portion of the engine’s power, especially at low speeds. Around town, at less than 40 mph, you’ll save fuel by keeping the A/C off. At higher speeds, it usually uses less energy to instead keep the windows rolled up and use the A/C as needed.

Don’t be idle. Simply put, prolonged idling wastes gas and it isn’t good for your engine either. Whether you’re sitting in traffic or in a parking lot for more than a minute, turn off the engine. Otherwise, you’re wasting it! If the engine’s already warm, it doesn’t take any extra gas to restart.

Use the fuel your vehicle requires. If your vehicle requires regular unleaded, you’re throwing the extra money away by using premium. It likely won’t give any significant difference in performance, fuel economy, or smoothness. But if you have a high-performance vehicle that specifies premium unleaded fuel (there’s usually a reminder inside the fuel-filler door), you may get significantly worse fuel economy with lower-grade fuel, offsetting the lower per gallon cost of the cheap stuff. The fail-safe rule is to just use the grade of gasoline recommended by the manufacturer.

news.ft.com By Andy Webb-Vidal in Caracas Published: February 25 2003 4:00 | Last Updated: February 25 2003 4:00

A pact condemning political violence, signed last week by the government of Venezuela's President Hugo Chávez and opposition leaders, appeared to be breaking down yesterday as opponents threatened to withdraw from the accord.

Opponents of Mr Chávez, grouped in the "Democratic Co-ordinator", warned they could rescind their side of the agreement unless the international community pressed the government into upholding the accord.

The warning follows the house arrest of Carlos Fernández, head of the Fedecamaras business federation, who was captured by armed security police in a heavy-handed midnight raid last week.

Mr Fernández is facing charges of "criminal instigation" and "civil rebellion" for his role in co-leading a two-month strike in December and January aimed, unsuccessfully, at pressing for early elections and forcing Mr Chávez's resignation.

"If the international community does absolutely nothing and the government does not uphold its side of the agreement we will withdraw," said Timoteo Zambrano, an opposition negotiator in talks facilitated by the Organisation of American States (OAS).

No outside sanctions were agreed as part of the accord, but opponents of Mr Chávez had hoped members of a six-nation "Group of Friends" would be able to lend diplomatic weight to reinforce the OAS-sponsored agreement.

The group - consisting of Brazil, Mexico, Chile, Portugal, Spain and the US - was formed in January to give fresh impetus to a four-month-old but virtually fruitless effort by the OAS to broker an electoral solution to the country's political deadlock, which has on several occasions spilled over into violence.

However, in a sign that Mr Chávez is willing to put already cool diplomatic relations on the line to deflect outside pressure, he has bluntly warned both the OAS and the "Group of Friends" not to interfere in domestic affairs.

Speaking on his weekly Alo, Presidente television show on Sunday, Mr Chávez accused both the US and Spain of taking sides with his opponents, who charge that the populist president and former paratrooper is governing like a dictator.

Government spokesmen from the US and Spain, and César Gaviria, secretary-general of the OAS, have expressed concern at the handling of Mr Fernández's case.

However, the Fedecamaras chief has said he was treated with due respect by the authorities.

www.asahi.com

As the tense situation involving Iraq casts a shadow over the world economy, finance ministers and governors of the central banks of the Group of Seven (G-7) key economic nations have concluded their meeting in Paris.

In their joint statement, the ministers said, Geopolitical uncertainties have increased'' and If the economic outlook weakens, we are prepared to respond as appropriate.'' In other words, ``geopolitical uncertainties'' means there is no telling what will happen to the world economy in event of war against Iraq.

The ministers should have just come out and said so plainly. But in diplomacy, a clear rift has emerged with the United States and Britain on one side and France and Germany on the other. The finance ministers must have sought to close ranks on economic issues, and their joint statement was worded to demonstrate their restraint.

Before the G-7 finance meeting began, French Finance Minister Francis Mer, the chairman, said it was not up to the finance ministers to decide whether there is to be a war. Of course, any decision on war would be made by the respective leaders of each country. But the impact of a war on the global economy is an important factor to be weighed in making such a decision.

All the big nations of the world face economic difficulties. In the United States, where personal consumption and capital investment have both started to decline, the ``twin deficits'' in federal budget and foreign trade have been growing. Japan has long struggled under deflation and the burden of bank nonperforming loans, with no way out of the slump so far. Among European nations, exports have fallen off because of the strength of the euro, and the German economy is still in the doldrums.

Oil prices stay at a high level because of the general strike in Venezuela, as well as the Iraq situation. And stock prices continue to be sluggish in all major markets.

What would a war add to these circumstances? In part, the answer depends on how long a war might last. But oil prices would quite likely rise and the global economy would be seriously affected by war. If the danger of terrorism is increased in the aftermath of war, the movement of people and goods would be restricted, and world trade could be curtailed as a consequence.

While the dollar used to be regarded as a strong currency in an emergency, it is now sold off in times of uncertainty. If the value of the dollar plunges, the economies of many countries that earn dollars from exports to U.S. markets could be caught up short.

The most important item on the agenda before the finance ministers meeting in Paris should have been the potential risks to the world economy in event of war. They should have discussed such issues in the meeting and reported the outcome to their leaders.

Bill Clinton defeated incumbent U.S. President George H.W. Bush in 1992, when there was still a lingering mood of America's victory over Iraq in the Persian Gulf War, on the slogan, ``It's the economy, stupid.'' Even if the United States wins a new war against Iraq, the American people will reject the George W. Bush administration if the post-conflict economy falters.

The same holds true of Japan, which has expressed its support for the U.S. position on taking military action against Iraq. Many people would like to ask Prime Minister Junichiro Koizumi, ``Mr. Prime Minister, will the nation's economy, already in trouble, be all right if a war breaks out against Iraq?''

The message coming out the the Paris G-7 meeting was simply a chanson that only adds to the anxiety of those who hear it.

--The Asahi Shimbun, Feb. 24(IHT/Asahi: February 25,2003)