www.channelnewsasia.com First created : 27 February 2003 2003 hrs (SST) 1203 hrs (GMT) Last modified : 27 February 2003 2220 hrs (SST) 1420 hrs (GMT)

OPEC said on Thursday it could cover any stoppage of Iraqi oil during war without the need for consumer countries to release emergency reserves.

OPEC Secretary-General Alvaro Silva said the group "won't use oil as a weapon" if war breaks out in Iraq.Advertisement "Yes, we are confident we can manage the situation given the level of production in Iraq," he told reporters at a news conference at OPEC headquarters.

"OPEC has been managing the case of Iraq for more than 10 years. We will try to alleviate the situation in the normal way and meet our commitment to stabilise the market."

Silva said the producer group was already pumping beyond official output limits but could not stop speculators driving oil prices higher.

Speaking as US oil prices set a post-Gulf war high of US$38.66 a barrel, he said: "This is not a problem of oil in the market, it is a problem of speculation."

"We put 2.8 million barrels a day more in the market in December and January and you can see the result," he said of extra OPEC output.

Industrialised consumer nations have yet to decide whether or not they will release crude from emergency stockpiles, should the United States launch an attack against Baghdad.

OPEC is hoping it has convinced the Paris-based International Energy Agency, which controls the reserves, that a repeat of its 1991 Gulf War emergency release will not be required.

OPEC says it has the capacity to fill any shortage from Iraq, as well as compensate for shortfalls from Venezuela, where a strike is in its 12th week.

Silva said OPEC had another four million barrels a day of spare supply ready to call on, easily enough to cover Baghdad's 1.7 million bpd of exports.

But with leading OPEC member Saudi Arabia already thought pumping nine million of its available 10.5 million bpd, independent experts put spare supply in the cartel at little more than two million.

OPEC meets on March 11 and is expected to leave official supply quotas unchanged.

ydr.com By SEAN ADKINS Daily Record staff Thursday, February 27, 2003

Increased demand for natural gas brought on by frigid temperatures and an unstable open market are to blame for a Columbia Gas price jump.

Officials with Columbia Gas will spend the next month hammering out an increased price gas cost adjustment that will go into effect April 1, said Robert Boulware, company spokesman.

Since January, hits ranging from the threat of a U.S.-led war with Iraq to labor strikes in Venezuela have increased prices on the oil used to heat homes and businesses. When businesses and homeowners switch to avoid those higher prices, natural gas prices rise.

Compared to last winter, consumers on a national level will pay 28 percent more for natural gas and an additional 52 percent for home heating oil, according to the Energy Information Administration.

While Columbia Gas officials could not provide an exact number or percentage for the increase, the company will submit its quarterly adjustment to the Pennsylvania Public Utility Commission on or before March 31.

That price adjustment will extend into June when the company will review prices on the open market.

Columbia Gas supplies its customers with natural gas from storage and fuel bought on the open gas market, Boulware said.

“At this point, production is not keeping up with demand,” he said. “This price increase is a direct pass-through from the market to the customer.”

The company serves about 82,000 customers in York County, 12,000 customers in Adams County and 100 in Franklin County.

Like Columbia Gas, Shipley Energy has been forced to face a harsh winter marred by a high demand for natural gas and home heating oil.

Since January, the company has experienced a nickel increase per week per gallon of home heating fuel, said Robert Iosue, vice president of marketing for the company.

Shipley Energy customers who heat their homes with oil have paid 50 percent more this year than last winter for their fuel, he said. For example, a fuel oil bill that was $100 last winter now hovers around $150.

“It’s just going through the roof,” Iosue said.

While natural gas prices are about three times what they were last year and the highest since 2001, customers can expect those jumps to level off as the weather improves.

Typically, a drop in natural gas demand occurs in the spring and summer and allows for the replenishing of reserves, Iosue said.

While the natural gas market is expected to improve, the gasoline market is still riding the wave of uncertainty.

For the last week, gasoline prices at Rutter’s Farm Stores have been jumping 2 to 3 cents only to slide back to a flat level within 24 hours, said Scott E. Hartman, president of the company.

“If we go to war, then prices will go up in the short term,” he said. “If the war is short, prices should drop significantly.”

Reach Sean Adkins at 771-2047 or sadkins@ydr.com.

worldnetdaily.com

Posted: February 27, 2003 1:00 p.m. Eastern By Diana Lynne © 2003 WorldNetDaily.com

Cuban dictator Fidel Castro may be on the hook for hundreds of millions of dollars in damages to an exile group for the shoot-down of its planes by Cuban MiG fighter jets.

A federal court in Fort Lauderdale, Fla., heard testimony yesterday in the damages phase of a lawsuit that seeks in excess of $40 million.

Judicial Watch, the public-interest group that investigates and prosecutes government corruption and abuse, filed the lawsuit last May against Castro, the Republic of Cuba and Castro's brother, Raul, who is the former director of the Cuban Secret Services and commander in chief of the Cuban Air Force.

The lawsuit was filed on behalf of José Basulto, founder and president of the Miami-based humanitarian group Brothers To The Rescue, or BTTR.

"Castro will pay for his murderous acts," said Judicial Watch Chairman and General Counsel Larry Klayman. "Unlike the U.S. government, Judicial Watch is taking action against Castro for this blatant terrorist attack against American citizens."

Basulto is a survivor of the Feb. 24, 1996, attack by Cuban Air Force fighter jets on three unarmed, civilian search-and-rescue aircraft operated by BTTR in international airspace over the Florida Straits. Two aircraft were shot down by Castro's MiGs, resulting in the deaths of Armando Alejandre Jr., Mario De La Pena, Carlos Costa and Pablo Morales.

Brothers to the Rescue pilots shot down by Cuban MiGs in 1996.

Basulto piloted the third Cessna that escaped the attack. Three others on board also survived.

"The aim was to kill me," Basulto told WorldNetDaily. "We were very threatening to Castro."

WorldNetDaily has reported testimony offered in a June 2001 trial of a Cuban spy network that infiltrated exile groups in Miami, including BTTR, provided evidence the BTTR aviators were assassinated.

Double agent Juan Pablo Roque had become a BTTR pilot and supplied information to the Cuban government as well as the FBI. Roque was part of the Cuban Intelligence Service's "Wasp Network." Five members of this espionage ring were convicted of 23 espionage-related charges.

BTTR is a humanitarian, pro-democracy organization that advocates the non-violent establishment of a democracy in Cuba. BTTR volunteers fly search-and-rescue missions for Cuban refugees. Since 1991, BTTR has saved the lives of over 4,200 Cubans seeking to cross the Florida Straits in search of freedom from communist Cuba. BTTR has flown close to 2,000 missions over the area of the 1996 shoot-down.

The incident sparked widespread condemnation of the Cuban government, which claimed at the time the planes were in Cuban airspace.

Castro subsequently admitted to ordering the shoot-down.

"I take full responsibility for what took place," Time magazine quotes him as saying in a Mar. 11, 1996, article.

Castro repeated this confession in a Sept. 3, 1996, interview with CBS News anchor Dan Rather.

On its website, BTTR links to a recording of the MiGs pilots' radio communications during the shoot-down.

Citing "expert independent sources and the U.S. government," BTTR claims to have enough evidence to prove that the Clinton-Gore administration had prior knowledge of the attack, consented to the shoot-down, collaborated with Castro's Cuba to make the crime possible and covered up its own participation by using misinformation and efforts to remove evidence and potential witnesses.

In 1997, families of three of the four victims successfully sued and were awarded $188 million in damages paid from Cuban government assets frozen in U.S. banks. The judge in that case called the attack an act of terrorism.

The Judicial Watch suit was filed under the Antiterrorism and Effective Death Penalty Act of 1996, which enables suits for money damages against foreign states that cause "personal injury or death that was caused by an act of …extrajudicial killing, aircraft sabotage… or the provision of material support or resources for such an act."

The U.S. designated Cuba as a state sponsor of terrorism in 1990. Cuba loses its immunity because of that, according to Klayman.

The Judicial Watch complaint maintains Castro and his brother are known to collaborate with other terrorists and terrorist states, such as Palestinian Authority leader Yasser Arafat, al-Qaida chief Osama bin Laden and the Irish Republican Army.

"[Deputy Defense Secretary] Paul Wolfowitz and everybody admits that he's got bio-chemical labs on his island and that he assists Iran, Iraq and Libya in terrorist activities. He's sponsoring the FARC in Colombia. He's in bed with Hugo Chavez in Venezuela. He's a bigger problem than he was 20 years ago," Klayman said.

The suit never went to trial. Last month, Basulto won by default because neither Castro nor his legal representatives responded to the legal action by the given deadline.

Cuba maintains U.S. courts have no jurisdiction.

This morning, Basulto and his wife provided testimony of their pain and suffering over Basulto being an assassination target and over the wrongful death of the BTTR brothers.

The verdict on the size of the award is expected in a few months.

"I hope [the suit] accomplishes first of all another public indictment of Castro for what he's done so he appears as the criminal and terrorist he is," Basulto told WND.

Basulto plans to use the damages award to "help bring freedom" to Cuba. He said he will disclose the details of plans to help buttress an opposition movement in Cuba when the verdict comes in.

Klayman plans to enforce the award against the frozen assets of the Cuban government in the U.S. and said, if necessary, he would attach accounts of American companies that are doing business with Castro – like travel agencies.

"We're trying Castro for acts of terrorism. He's even worse than Saddam Hussein, and the president needs to do something about him," Klayman told WND. "We're not only trying to get justice for Jose Basulto but we're sending a message to the president that Castro should be next."

Judicial Watch also filed a criminal complaint against Castro and his brother in Brussels, Belgium, for crimes against humanity.

We're trying Castro for acts of terrorism. He's even worse than Saddam Hussein and the president needs to do something about him. We're not only trying to get justice for Jose Basulto but we're sending a message to the president that Castro should be next.   --Larry Klayman, Judicial Watch chairman and general counsel

www.theithacajournal.com

WASHINGTON -- Warning that New York gas prices could jump to at least $1.90 a gallon by spring, Sen. Charles Schumer on Wednesday renewed his call for the Federal Trade Commission to investigate the possibility of price gouging across the country.

"We are about to go to war and the last thing we need is unnecessarily high gas prices," Schumer said.

New York motorists were paying on average $1.76 a gallon Wednesday compared with $1.22 per gallon on the same date a year ago -- an increase of 44 percent, according to the American Automobile Association. Schumer said experts tell him that gas prices could jump another 10 to 15 cents by April mainly because of crude prices hitting an all-time high of $36 per barrel Tuesday.

The huge jump in gasoline prices, especially the rapid increase in the last month, has alarmed lawmakers and consumer groups. Most of the price spike is attributed to fears of war with Iraq and an oil strike in Venezuela, one of the top four sources of oil exports to the United States. But some lawmakers and consumer advocates, including Schumer and the AAA, don't rule out the possibility of price manipulation at the pump.

Schumer wrote to FTC Chairman Timothy Muris this month, calling for a comprehensive investigation into gas pricing. As of Wednesday, Muris had not replied.

cbs.marketwatch.com By Myra P. Saefong, CBS.MarketWatch.com Last Update: 6:12 PM ET Feb. 27, 2003

NEW YORK (CBS.MW) -- Crude futures soared toward a fresh 12-year high before easing back Thursday, as traders maintained a high degree of wariness over the latest developments regarding a possible war with Iraq.

Crude for April delivery traded as high as $39.99 a barrel, within hailing distance of the all-time high seen in the futures market -- $41.15, back in October 1990.

But traders calmed down by midday, with the April crude contract closing down 50 cents at $37.20 a barrel on the New York Mercantile Exchange.

"Once the psychological $40 barrier was not breached, this instigated traders to sell," said John Person, head financial analyst at Infinitybrokerage.com.

The market, having factored in as much negative news it could take, turned because it was "way overbought and all this market needed was a bit of good news to ... bring sellers in," he said.

Oil futures eased off their highs after U.S. officials lowered the nation's terror-alert level to "yellow" from "orange" -- reflecting the decreased threat of a terrorist attack on the nation.

Moreover, Egyptian media reported that Iraq might yet decide to destroy its al-Samoud 2 missiles, a move that would imply greater cooperation by Baghdad with U.N. weapons inspections.

Late Thursday, U.N. officials confirmed that Iraq agreed "in principle" to destroy the missiles, the Associated Press reported. Chief weapons inspector Hans Blix had given Iraq a March 1 deadline to at least begin destroying them.

Meanwhile, gold futures fell back to a more than one-week low on the back of that news. See Metals Stocks.

But several analysts said the lack of moonlight over Iraq this weekend could well raise the likelihood of an attack very soon.

Blix's scheduled testimony to the U.N. Security Council on Saturday "coincides with a new moon this weekend that provides cover for an invasion," said Peak Trading Group analyst Charles Nedoss. Also see Thom Calandra's StockWatch.

After an invasion, several issues will affect oil and gas prices.

"If prices are this high now, imagine where they may go if war drags out longer than three months," said Person.

"Supply disruptions from tankers in the Middle East may cease shipments as war develops for safety concerns," he said -- an important consideration in light of both recent declines in petroleum supplies and surging consumer demand both here and abroad.

Price scenarios

The immediate concern for traders in the event of a U.S.-led war against Iraq "will be the condition of the oil fields," said Todd Hultman, president of Dailyfutures.com.

There has been speculation that Iraqi leader Saddam Hussein plans to blow up the oil fields. Saddam denied those notions during a recent interview with CBS News. See more on this story.

If he does damage the fields, "you can expect crude prices to hit new record highs," said Hultman. But "if the oil fields stay untouched and the war progresses successfully for the U.S. in the first week, there could be heavy selling -- at least down to $28 per barrel."

Peak Trading Group analyst Michael Cavanaugh said a war "may not harm the actual supplies as much as expected, and a drastic spike followed by a downturn should be expected, with probably another upswing to follow."

Specifically, he believes the "onset of the war uncertainty and emotion would spark a huge rally" in oil. After that subsides, "traders will realize this emotional rally and profit taking will drive the market back down," said Cavanaugh. See Special Report: Countdown to War.

In the ensuing phase, he explained that the profit taking will become overdone and a new rally will set prices back above the $40 area "until the war is over and the chaos in the Middle East is brought down."

An interesting thing to note: exactly 12 years ago to the day, President Bush senior announced that the U.S. and its allies had successfully liberated Kuwait and defeated Iraq's army, the New York Times reported.

Tight supplies

Against a backdrop dominated by potential war, traders have been focusing in on oil supplies, which stand precariously at low levels.

U.S. inventories of crude stand around 271 million barrels -- near the 270 million barrels that the U.S. government sees as the minimum level at which refineries can continue to operate normally. The supplies are 16.3 percent below the year-ago level.

During the week ended Feb. 21, supplies fell by 1 million barrels, the Energy Department said Wednesday. The American Petroleum Institute reported a 3 million-barrel rise.

Meanwhile, distillate inventories fell for a sixth-straight week -- to a level not seen in nearly three years.

The Energy Department reported distillate inventories, which include heating oil, dropped by 4.5 million barrels, putting total supplies of 99.1 million barrels below the 100 million level for the first time since May 2000. They're now 25 percent below their year-ago level.

Separately, the API pegged the drawdown at 3.2 million barrels, to 103.8 million.

Gasoline inventories also declined last week, falling by 3.1 million to 208.1 million barrels and by 792,000 barrels to 209.9 million barrels, according to the respective readings by the API and the Energy Department.

On Thursday, March heating oil fell by 0.06 cent to $1.1543 a gallon, while March unleaded gasoline closed at $1.018 a gallon, down 0.03 cent.

Natural gas supplies drop

Natural gas for April delivery closed modestly higher, pressured by crude's weakness but coincidentally supported by a hefty draw in last week's U.S. supplies.

April natural gas closed at $7.485 per million British thermal units, up 9.5 cents on the session, following a dip to a $7.10 low. On Tuesday, the March contract rose as high as $10.50, moving past the previous record of $10.10 dating from December 2000.

"The rally in natural gas prices will continue given the weather forecast, which calls for more low temperatures, low storage levels and rising crude oil prices," said Economy.com energy economist Thorsten Fischer.

Early Thursday, the Energy Department reported the nation's supplies dropped by 154 billion cubic feet in the week as of Feb. 21.

Analysts at Fimat USA had been expecting a drawdown on the order of 138 billion cubic feet, while other market estimates called for bigger decreases. A year earlier, supplies fell by 73 billion cubic feet.

Supplies of natural gas are unusually tight. Total stocks of 1.014 trillion cubic feet are 948 billion cubic feet less than last year at this time and 508 billion below the five-year average, the government reported.

"Recent draws in storage, as well as continued cold temperatures, have led to upward pressures on natural gas prices," said Fischer.

High oil prices have also translated into greater demand for natural gas, he said, noting that the high oil prices drive users to switch to natural gas from petroleum-based fuels.

In the equities arena, most oil-service shares closed lower, with the Philadelphia Oil Service Index ($OSX: news, chart, profile) down 2.6 percent. See Energy Stocks.

The Reuters/CRB Index, a broad-based measure of the commodity futures market, closed at the 246 level, down 1 percent, on weakness in gold futures. Myra P. Saefong is a reporter for CBS.MarketWatch.com in San Francisco.