www.businesswire.com BW5819 FEB 24,2003 15:26 PACIFIC 18:26 EASTERN Business Editors     --(BUSINESS WIRE)--

    TOPIC: According to the Lundberg Survey, the average price of a gallon of gasoline has increased 7 cents in the past two weeks, as reported by CNN.com. The survey found that Americans are currently paying an average of $1.66 per gallon of self-serve regular, while two weeks ago they were paying $1.59. Experts believe that concerns over a war with Iraq and the oil industry strike in Venezuela have contributed to higher gas prices. Experts also cite domestic factors such as the extreme cold weather, especially in the Northeast, has increased the demand of heating oil, which is made from crude oil.

EXPERTS: ExpertSource can offer several highly qualified experts to comment on this story: Jim Gagne is the chief communications officer for Wayne, PA-based Planalytics, which helps companies make more effective and profitable decisions by forecasting weather-driven changes in supply, demand and prices for products and services. Companies in all industries use Planalytics' technologies to avoid squandered opportunities and poor financial results caused by the unanticipated impact of weather volatility. Planalytics provides additional vital future intelligence into supply chain planning, quantifying how, where, and when weather will affect supply and demand for specific products and services. Planalytics experts can comment on consumer motivation and behavior, forecasting consumer demand, retail sales trends, holiday sales, and the effect of weather on sales and the economy, natural gas demand and prices, and electric power demand. 610-407-2956, jg_gagne@yahoo.com

    Dr. Dennis Jay O'Brien, of the Institute for Energy Economics and Policy, can discuss oil and gas market analysis and energy economics. 405-325-3821, 405-325-0311 (University PR Phone)

    Professor Arlon R Tussing, of the University of Alaska Anchorage Institute of Social and Economic Research, is an expert on subjects such as economics, gas and electrical industries of North America. 206-275-0665 or 907-786-7710

    ExpertSource cannot guarantee the immediate availability of these experts or their familiarity with this specific issue.

    ExpertSource provides academic and industry experts to the media at no charge. Journalists are encouraged to submit queries to ExpertSource when seeking experts on specific subjects. An online registration form is available at www.businesswire.com.

--30--CE/cg*
CONTACT: Business Wire ExpertSource Group
         888/292-4446 or expert.source@businesswire.com
KEYWORD: NEW YORK
INDUSTRY KEYWORD: ENERGY OIL/GAS ADVISORY
SOURCE: ExpertSource

www.forbes.com Reuters, 02.24.03, 6:11 PM ET By Jan Paschal NEW YORK, Feb 24 (Reuters) - Stocks fell in most of the world's major markets on Monday while U.S. bonds rose as investors sought safe-haven investments after the United States and Britain circulated a U.N. resolution setting the stage for war with Iraq. Tokyo proved to be the exception to falling-stocks syndrome, with the Nikkei finishing higher following Friday's rally on Wall Street. The yen hit its highest level against the dollar in almost a month on word that Toshihiko Fukui, a conservative on policy, would be the next governor of the Bank of Japan. Fears of a U.S.-led war with Iraq pushed the dollar down against the euro, Europe's single currency. France and Germany are among the U.N. Security Council members opposing U.S. plans to use military force, instead of diplomacy, to oust Iraq's President Saddam Hussein. "War talk is putting the market on the defensive," said John Person, head analyst with Infinity Brokerage Services. In New York, crude oil futures jumped in reaction to concerns that a war in Iraq could disrupt supplies, already thinned by a strike in Venezuela. A bitter cold snap and forecasts for more of the same in the northeastern United States drove up heating oil futures prices and spilled over into the crude market. Gold futures soared in New York, buoyed by a tide of safe-haven investing sentiment. WALL STREET HIT BY WAR DRUMS The blue-chip Dow Jones industrial average <.DJI> fell 159.87 points, or 1.99 percent, to close at 7,858.24, according to the latest available data. The broader Standard & Poor's 500 Index <.SPX> lost 15.59 points, or 1.84 percent, to 832.58. The technology-laced Nasdaq Composite Index <.IXIC> dropped 26.64 points, or 1.97 percent, to 1,322.38. After two straight weeks of gains on Wall Street, worries of a military strike against Iraq sidelined investors once again as Washington and London circulated a new resolution at the United Nations on Monday. The measure declares Baghdad in violation of U.N. demands to disarm peacefully. British Foreign Secretary Jack Straw said the U.S. and Britain would allow two weeks for a U.N. decision on the new resolution, reinforcing long-held market suspicions that an attack on Iraq was likely sometime in March. "You have the Iraq decision, which keeps getting moved out. It's like water torture," said Michael Murphy, head of equity trading at Wachovia Securities. "Until then, there is no rhyme or reason to get out there in stocks." Retail stocks slid after top retailers J.C. Penney Co. Inc. (nyse: JCP - news - people) and Federated Department Stores Inc. (nyse: JCP - news - people) cut their February sales forecasts, saying severe winter storms hurt business over the Presidents Day weekend. J.C. Penney lost 95 cents to $19.39. Federated shed 76 cents to $24.82. Wal-Mart, a Dow stock, lost $1.26 to $47.64. FROM EUROPE, A WHIFF OF ENRON In addition to the prospects of war in Iraq, another factor that rocked European equities on Monday was news that retailer Ahold <AHLN.AS> (nyse: AHO - news - people) of The Netherlands had found accounting irregularities at its U.S. Foodservice unit and its chief executive and chief financial officer had resigned. The FTSE Eurotop 300 index <.FTEU3> slipped 8.99 points or 1.14 percent to 777.13. In Amsterdam, Ahold shares lost up to 68.3 percent of their value. On the New York Stock Exchange, the U.S.-listed shares of Ahold fell 61.09 percent, or $6.53, to finish at $4.16. "It's a shock," said Gert de Mesure, head of equity strategy at Delta Lloyd Securities in Antwerp. "The company will find it more difficult to finance all its debt, and Ahold now will have to find a new credible management and guarantee the continuity of the business." The DJ Stoxx 50 index <.STOXX50> fell 23.09 points or 1.04 percent to 2,196.99. In London, the FTSE 100 index <.FTSE> declined 25.3 points, or 0.68 percent, to close at 3,701.8. Monday's session was not kind to drug stocks on either side of the Atlantic. In Germany, shares in Bayer AG fell nearly 10 percent after The New York Times reported in its Saturday edition that Bayer's senior executives know of the risks associated with its cholesterol drug, Baycol, long before the medicine was recalled. Bayer, part of the blue-chip DAX index <.GDAXI>, fell 9.73 percent to close at 14.29 euros, its lowest level since July 1993. The DAX fell 2.93 percent. On the Nasdaq, shares of vaccine maker VaxGen Inc. (nasdaq: VXGN - news - people) sounded another downbeat note, sinking as much as 55 percent after its president said a trial of the first AIDS vaccine to be tested in people was overall a failure. VaxGen sank $6.16 to $6.86. In Tokyo, the benchmark Nikkei average <.N225> closed at 8,564.95, up 51.41 points or 0.60 percent. BONDS, GOLD, OIL RALLY; DOLLAR FALLS In the U.S. government bond market, the benchmark 10-year note <US10YT=RR> rose 11/32 to 100-6/32, taking its yield back down to 3.85 percent from 3.89 percent late on Friday, and back toward the year low around 3.84 percent. The 30-year bond <US30YT=RR> climbed 15/32 to 108-17/32 for a yield of 4.81 percent, down from 4.85 percent on Friday. "The market is priced somewhere in between a war and a major disaster," said Mark Mahoney, fixed-income strategist at UBS Warburg. "We're not priced for a peaceful solution. We're not priced for a quick resolution." In late U.S. currency trading, the yen <JPY=> traded at 117.85 per dollar, up 0.60 percent from 118.69 at Friday's close. Earlier in the day, the yen rose as high as 117.60 per dollar, its highest level in almost a month. The euro <EUR=> rose to $1.0789 against the dollar from $1.0765 on Friday. On the New York Mercantile Exchange, crude oil for April delivery rose 90 cents to settle at $36.48 per barrel, not far from its 29-month high of $37.55 hit last Thursday. NYMEX heating oil for March delivery jumped 3.47 cents to settle at $1.0475 a gallon. In London, April Brent crude gained 91 cents to $33.18 a barrel. COMEX April gold surged $4.60 to end at $356.40 an ounce.

usinfo.state.gov

QUESTION: Venezuela?

MR. REEKER: Sure, we will go next door and then we ill go around, back to Mr. Lambros.

QUESTION: Venezuela. Did you know of any plans for the Friends of the OAS Secretary General to meet again on Venezuela, and are you pressing for any such meeting?

MR. REEKER: I don't know of anything on a specific meeting. I think the Friends group are in regular contact and working, obviously, with Secretary General Gaviria. They are, after all, named the Friends of the Secretary General of the Organization of American States. That is, these diplomatic representatives in our case, Acting Assistant Secretary Curt Struble, Acting Assistant Secretary for Western Hemisphere Affairs, who has been working with his colleagues from some other Latin American countries, from Iberian countries, to support the efforts of the Secretary General to help the Venezuelans find a solution, a peaceful solution, a constitutional and electoral solution to the situation there.

We continue to encourage the Government of Venezuela and the opposition to honor the nonviolence pledge that they signed, I believe last week, the 18th, I think it was, 18th of February. I would point out that the first point of that agreement from the 18th, that accord specifically emphasizes the need to curb confrontational rhetoric and moderate the tone, style and content of language.

So we are concerned, I think given the current situation of the last few days, that heightened political rhetoric has contributed unnecessarily to some of the recent violence in Caracas. We would note that according to Venezuela's constitution, the judiciary, not the president, decides what charges to bring in criminal cases and inflammatory statements such as those attributed to President Chavez are not helpful in advancing the dialogue between the Government of Venezuela and the opposition and the bringing, of course, of a peaceful resolution to the current state of affairs.

QUESTION: Well, when you say attributed to President Chavez, are you -- does that mean you're not -- you don't know whether he really made them or?

MR. REEKER: I think that would be it. We have seen the reports of the statements that have then led to some of this rhetoric back and forth and we don't think that is particularly helpful.

QUESTION: Well, is the United States pleased, though, that the strike appears to be losing its momentum and that oil exports are on the increase?

MR. REEKER: I don't know. I have not looked into that nor could I, you know, categorize anything in that way. What we have been concerned about and remain concerned about is the rhetoric, the government's rhetoric and some of the actions that have been undermining the dialogue process.

We certainly reiterate that the Venezuelan authorities must respect Mr. Fernandez' and Mr. Ortega's rights as guaranteed by the constitution and we are still strongly urging the parties on both sides to continue to pursue the dialogue as facilitated by the OAS Secretary General and supported very much by the Friends of the Secretary General group to find a constitutional, democratic, peaceful and electoral solution to this crisis.

QUESTION: But in general, is there a feeling that the crisis is less severe than it was --

MR. REEKER: I don't think I want to categorize our feeling. We are still very concerned about the situation there and are continuing our efforts as part of the Friends group to support the Organization of American States and the Secretary General's efforts in this regard, as called for in the OAS Permanent Council Resolution Number 833.

Now, we will go to Mr. Lambros and then we will hop to the other side.

www.usatoday.com Posted 2/24/2003 5:15 PM

NEW YORK (AP) — Crude oil futures rallied again Monday, boosted by record intraday prices for heating oil and continued fears about war in Iraq.

Natural gas futures also surged on a blast of cold air that is seen boosting heating demand into next week in a market already worried by tumbling gas supplies.

On the New York Mercantile Exchange, the front-month March heating oil contract climbed to a record of $1.1535 a gallon, surpassing the previous all-time high of $1.15, set in November 1979. The contract closed at $1.1467 a gallon.

The rally gave the rest of the petroleum complex a lift. Nearby April crude rose 90 cents to close at $36.48 a barrel. March gasoline settled at $1.0475 a gallon, up 3.47 cents on the day.

Across the Atlantic on London's International Petroleum Exchange, the gains were just as strong. Nearby April North Sea Brent futures closed up 88 cents at $33.15 a barrel.

"The crude oil market continues to trend higher, pulled along by a strong heating oil market and the continued drumbeat for war with Iraq," said Tim Evans, senior energy analyst at research firm IFR Pegasus in New York.

The heating oil surge mirrored a rally in natural gas futures, which climbed to 25-month highs on forecasts of cold weather and expectations of a sharp drawdown in storage. The March contract shot up $2.531, or 38%, to settle at $9.137 per 1,000 cubic feet.

"What's concerning the market today is that the weather is not giving us any signs of spring," said Phil Flynn, a trader and analyst at Alaron Trading Corp.

Although heating oil's climb to record territory was part of the reason for Monday's rally, the market's main focus remained Iraq, analysts said.

War jitters heightened after the U.S., the U.K. and Spain introduced a U.N. Security Council resolution today that finds Iraq in breach of its disarmament obligations and warns the rogue nation of "serious consequences."

The resolution says that Iraq has failed to "take the final opportunity" afforded it to disarm.

"People view that as another step toward war," said Tom Bentz, an analyst at BNP Paribas Futures.

Traders worry that an attack will result in a disruption of Iraqi oil exports and cause a supply disruption in the Middle East, the world's principal source of oil.

Western officials say they expect a vote on the resolution within the next two weeks.

But approval is far from guaranteed. Earlier Monday, key U.N. Security Council members France, Germany and Russia submitted an alternative proposal for step-by-step disarmament of Iraq

Despite the opposition, however, the U.S. has said it is prepared to lead an attack on Iraq without a new resolution.

With the market's focus on Iraq, traders shrugged off news of continued increases in Venezuelan oil output.

On Sunday, state oil company President Ali Rodriguez said Venezuelan crude oil output, crippled by a strike in December and January, has risen to more than 2 million barrels a day.

Before the strike, Venezuela exported about 3.1 million barrels a day of crude oil.

money.cnn.com February 24, 2003: 4:36 PM EST By Mark Gongloff, CNN/Money Staff Writer

NEW YORK (CNN/Money) - As U.S. gasoline prices climb to near record highs, some say relief is sitting in vast salt caverns near the Gulf of Mexico -- about 600 million barrels of oil, that is. Black gold. Texas tea.

But while tapping this reservoir could cut oil and gas prices, President Bush probably won't turn the spigot, at least not until war breaks out in Iraq. And that's probably a good thing, according to some economists and energy experts.

Driven by worries about a possible U.S.-led war in Iraq and an oil workers' strike in Venezuela, the world's No. 5 oil exporter, crude oil prices have nearly doubled in the past year, surging to two-year highs. Iraq sits on the world's second-biggest untapped oil reserve and is in the middle of the world's biggest oil-producing region, the Persian Gulf.

Meanwhile, gasoline prices have jumped about 20 percent in the past six months and about 50 percent in the past year.

Motorists in some cities around the country are paying $2 for a gallon of gas, and a recent survey by the American Automobile Association (AAA) found U.S. gas prices averaging about $1.66 a gallon, not far from the survey's record high of nearly $1.72, reached in June 2001.

All of this is bad news for a U.S. economy still struggling to recover fully from the recession it suffered in 2001.

Higher oil and gas prices act as a sort of tax on consumers and businesses, according to many economists. If consumers are spending more at the gas pump, they've got less to spend on other things, and businesses have a harder time making a profit when they have to pay more for energy.

As a result, some politicians have begun calling for President Bush to release oil from the Strategic Petroleum Reserve (SPR), those vast pools of oil sunk deep beneath Texas and Louisiana, to boost the supply of oil and drive prices down. Related stories Gas gouging alleged U.S. hits oil slick The Iraq effect

"Having but not using the SPR is like having an ace in the hole and saying you're not going to play the card," Sen. Charles Schumer, D-N.Y., said last week.

But most oil analysts say it's impossible to tell how much good releasing oil from the SPR would actually do to cut prices, with so many factors -- including the possibility of an oil-worker strike in Nigeria, a key exporter, and an exceptionally cold winter in the Northeast -- pulling oil prices in different directions.

"There are so many factors going on right now; it's a perfect storm," said Genevieve Murphy, a spokeswoman for the American Petroleum Institute, an industry lobbying group.

What's more, if the United States makes a habit of toying with its SPR simply to manipulate prices, it could find itself in the position of competing with the Organization of the Petroleum Exporting Countries (OPEC), the cartel that exports about 38 percent of the world's oil and has a big influence on oil prices.

"We could say we were releasing oil to drive prices down until they get to $25 a barrel," said Fadel Gheit, oil analyst with Fahnestock & Co. "Then OPEC could say it'll cut production to keep prices up. It's a very delicate subject to tinker with."

The SPR was established after the Arab oil embargo of 1973-74, which caused oil and gasoline prices to nearly quadruple, leading to a long and nasty U.S. recession.

The SPR's 600 million barrels of oil could allow the United States to survive for up to 60 days without any oil imports and for up to 300 days without imports from the Persian Gulf.

Its oil is meant for use only in the event of oil supply shortages "of significant scope or duration" that hurt the economy. Though it's been used in other ways -- including a sale made to help balance the federal budget in 1996 -- President Bush has long held that he won't touch the SPR except in extreme cases.

"The SPR is, by design, to be used for severe disruptions of the market. That is a type that has not occurred," White House spokesman Ari Fleischer said last December, a stand the administration has maintained ever since. War might lead to tapping the SPR

Some analysts think the eruption of hostilities in Iraq -- which could happen in the next few weeks -- will be the right moment to tap the SPR.

Bush's father did the same thing at the start of the Gulf War in 1991, authorizing the sale of 14 million barrels from the SPR at the same time he announced that the military effort to drive Iraqi forces from Kuwait had begun. The average price of a barrel of crude oil plummeted from $32.25 on Jan. 16, 1991, the day of the announcement, to $21.48 the following day.

The idea that the United States was willing to keep oil flowing through the market provided a big psychological boost, analysts said -- a boost that might soon be necessary again.

"The market is so fragile that there needs to be an announcement [of SPR tapping] simultaneously with the announcement of war," said Larry Goldstein, President of PIRA Energy Group, who along with PIRA Chairman John Lichtblau, authored the SPR concept in 1971. "Barrels and bombs must be released simultaneously."

Though Goldstein and Lichtblau criticized the first President Bush for not tapping the SPR sooner, Goldstein said the current President Bush should wait in this instance because it's possible the SPR release might not be necessary -- there might not be a war at all.

And other analysts note that simply going to war might not be enough to constitute a supply emergency; Bush might not tap the SPR until he sees actual disruption in supply.

After all, oil prices will probably fall a bit once war begins simply because traders will be relieved that the build-up to war is over; and prices would be falling in the spring anyway, when demand for heating oil drops.

"We could suddenly have oversupply and weaker demand, and that will probably bring oil prices down on their own," said Gheit of Fahnestock & Co.