www.vheadline.com Posted: Thursday, February 27, 2003 By: Robert Rudnicki

A march by opposition supporters through the streets of Caracas has forced the postponement of Organization of American States (OAS) led peace negotiations which had been scheduled to restart in the afternoon after being suspended last week due to OAS secretary general Cesar Gaviria's previous commitments. 

The talks had to be postponed as thousands of marchers protested outside the Gran Melia de Caracas hotel where talks have been taking place.

The negotiations are now expected to restart today, Thursday, with opposition and government negotiators likely to discuss the arrest of Venezuelan Federation of Chambers of Commerce & Industry (Fedecamaras) president Carlos Fernandez and the arrest order for Confederation of Trade Unions (CTV) president Carlos Ortega, as well as the arrest orders for seven Petroleos de Venezuela (PDVSA) rebels who are leading the ongoing strike action.

Opposition leaders claim the government has gone back on last week's no-violence agreement, but government officials insist the arrests are lawful.

www.vheadline.com Posted: Thursday, February 27, 2003 By: Robert Rudnicki

The United States embassy in Caracas will not be opening today due to a security alert following the bombings of Colombian and Spanish diplomatic missions this week. An embassy statement said "the US embassy in Caracas has received a credible threat to its security and will be closed to the public on Thursday, February 27, 2003."

Exact details of the threat were not made available, but the embassy is expected to open again normally on Friday this week.

• Security measures have been stepped up at many diplomatic buildings in Caracas, as the government seeks to reassure foreign diplomats about possible safety risks.

Opposition leaders have accused government supporters of the attacks, while government members are blaming sections of the opposition looking to further damage the government's international reputation.

www.boston.com By Peter J. Howe, Globe Staff, 2/27/2003

Massachusetts homeowners and businesses using natural gas for heating are likely to see rates jump 13 to 36 percent in March and April, as the effects of soaring global energy prices, plummeting inventories, and heavy winter demand trickle down to utility bills.

Gas utilities including KeySpan Energy Delivery, Bay State Gas, and NStar Gas are asking state regulators for permission to raise rates starting Saturday, ranging from a 12.7 percent cost-of-gas increase for former Boston Gas customers now with KeySpan to a 35.6 percent increase for Bay State's 270,000 customers.

The local gas hike requests, which are likely to be approved by the state Department of Telecommunications and Energy, come as US crude oil futures soared to their highest prices since Iraq invaded Kuwait in 1990, hitting $37.70 a barrel yesterday for April delivery on the New York Mercantile Exchange.

Besides fears that a war with Iraq could disrupt supplies and the effects of an oil workers strike in Venezuela could linger, futures prices jumped on reports from the Energy Department that domestic inventories of oil, gasoline, and other fuels have dropped. Oil inventories are down 14 percent from a year ago and supplies of so-called distillates, including diesel fuel and heating oil, dipped below 100 million barrels for the first time since May 2000.

At the same time, bitterly cold weather in the Northeast and Midwest has raised natural gas demand sharply, causing storage inventories to drop 43 percent below last year's levels and 27 percent below five-year averages, according to Bloomberg News surveys. The Energy Department is widely expected to report today that US gas inventories are at their lowest level since May 2001.

The demand-supply squeeze has caused gas prices to jump about 40 percent this year and has caused the more volatile futures market prices to triple in the last 12 months. Because gas is used to produce roughly half the electricity generated in New England, soaring gas rates could begin to drive higher electric rates this spring and summer as well.

Massachusetts gas utilities filing for rate increases cited the national and global market trends.

''Weather is probably the single biggest factor, because usage is up, and we can only charge the customer what we pay,'' said KeySpan Energy spokeswoman Carmen Fields.

KeySpan owns the former Boston Gas, Essex Gas, and Colonial Gas. The new rates would raise the cost per therm - a unit of gas - used by Boston Gas customers by 12.7 percent, to 86.15 cents for March and April.

Essex rates would jump 18.9 percent, to 76.6 cents. Rates in Colonial's Lowell-Merrimack Valley territory would climb 16.9 percent, to 88.6 cents. And rates in Colonial's Cape Cod territory would rise 17 percent, to 88.02 cents. Those figures are for the cost of gas only and do not include fixed delivery and service charges. The typical homeowner uses 100 to 200 therms of gas for heating in colder months.

Bay State, which serves 61 Massachusetts cities and towns, would increase energy rates from 73 cents per therm to 99 cents, a 35.6 percent increase, according to spokesman Charles Moran. That would produce a total rate of $1.17 per therm, including delivery and service fees.

NStar, which provides gas service to 246,000 customers in 51 cities and towns as well as electricity to 1.1 million customers, also plans to seek higher gas rates, as will several smaller utilities around Massachusetts.

NStar spokesman Michael Durand said last night it is seeking to raise the cost of gas per therm from 70.7 cents to 89.4 cents. For typical NStar customers using 144 therms of gas for heating, hot water, and cooking, the new rate would raise their monthly bill by about $27 to $186, Durand said. Direct comparisons, however, are difficult because most customers use less gas in March and April than in January and February.

Some economists fear the soaring retail energy prices could become one more drag on an already weak US economy. Steven Wieting, a Salomon Smith Barney Inc. economist, said the current annual rate of total US consumer spending on gasoline, heating oil, and natural gas is $50 billion higher than it was a year ago and totals about 0.7 percent of disposable personal income.

''It will affect the consumer's capacity to spend and will affect sentiment,'' Wieting said.

Dwindling supplies sent oil futures as high as $1.18 a gallon in New York trading yesterday, a 25-year record. Heating oil supplies on the East Coast, which accounts for about three quarters of US heating oil use, fell 16 percent last week to their lowest levels since May 2001.

Regulators at the Commodity Futures Trading Commission, which polices US energy futures markets, yesterday said they have increased ''floor surveillance'' at New York trading pits but found no evidence of market manipulation driving soaring futures prices.

''There was nothing in that [surveillance] that gave us any pause or gave us any feeling that there was any sort of manipulation taking place,'' Michael Gorham, director of the CFTC's market oversight division, told Reuters. Gorham said increases appear to be explanied by cold weather, lower inventories, and the threat of war with Iraq.

Peter J. Howe can be reached at howe@globe.com. Material from Globe wire services was used in this report.

This story ran on page C1 of the Boston Globe on 2/27/2003.

www.boston.com By Stephen Ixer, Associated Press, 2/27/2003

CARACAS - A march by thousands of antigovernment protesters forced the suspension yesterday of talks aimed at ending Venezuela's political turmoil, while the US Embassy beefed up security following ''credible'' threats.

Marching just days after the arrest of a leader of a crippling two-month strike, the demonstrators dared President Hugo Chavez's government to jail them, waving placards reading ''Chavez, your mask is off, dictator!'' and ''Put us all in prison!''

Talks between government and opposition delegates were scheduled to begin midafternoon yesterday, but the marchers' route passed by the negotiations venue, forcing their rescheduling until today.

Protest leader Carlos Fernandez has been ordered under house arrest to face rebellion and other charges for leading the 63-day general strike against Chavez. Police are searching for strike co-leader and labor boss Carlos Ortega.

The protesters marched past the Fedecamaras business chamber of which Fernandez is president and ended at the labor confederation headquarters where Ortega is president. There were no reports of violence.

Meanwhile, the US Embassy closed yesterday after receiving ''credible information of a threat to its security,'' a statement said. On Tuesday, two bombs ravaged Colombian and Spanish diplomatic missions, injuring four people and generating more fears.

At US request, Venezuelan officials said they sent more than a dozen federal agents, national guardsmen, and municipal police to boost security around the embassy.

This story ran on page A10 of the Boston Globe on 2/27/2003.

reuters.com Thu February 27, 2003 04:22 AM ET By Tanya Pang

SINGAPORE (Reuters) - Oil prices shot to a 12-year high Thursday as a severe bout of winter weather in the United States drained fuel stocks, leaving energy consumers dangerously exposed ahead of possible war in Iraq.

U.S. light crude in electronic trade hit $38.66 a barrel, the highest oil price since the 1990-1991 Gulf crisis when crude peaked at over $41 shortly after Iraq's invasion of Kuwait.

London Brent LCOc1 opened up 63 cents at $33.70 a barrel, a two-year high, and U.S. heating oil futures HOc1 bolted to $1.18 a gallon, matching this week's all-time highs.

"There remains a war premium of some $2 to $6 on any given day, but there is tightness in fundamentals at the moment and oil prices would certainly be higher than normal, even without Iraq in the picture," said Paul Ashby, analyst at ABN Amro in Sydney.

The U.S. government's Energy Information Administration (EIA), said Wednesday that the nation's distillate stocks, including winter heating oil, fell 4.5 million barrels in the week to February 21.

U.S. winter demand for distillates in the last four weeks has been more than 20 percent above last year and stocks are 33 percent below year-ago levels, the EIA said.

The fall in inventories has been driven by abnormally low temperatures in the U.S. Northeast, the world's biggest heating oil market, and by lower imports from Venezuela, where oil exports have been hit by a strike now in its 12th week.

Forecasts predict colder-than-normal temperatures continuing in the Northeast through to next week.

Record natural gas prices mean factories are expected to generate additional pressure on oil stocks as they switch to using distillates for fuel.

The EIA also reported a one-million-barrel fall in crude stocks to 272 million barrels, leaving inventories at their lowest since 1975, just above the 270-million mark considered a minimum to keep U.S. refineries in operation.

SATURDAY DEADLINE FOR IRAQ

U.S. Energy Secretary Spencer Abraham said earlier this week that Washington was ready to release crude from the 600-million-barrel national reserve if it judged a war in Iraq was causing severe supply disruption.

Iraq exports roughly two million barrels per day (bpd) of crude, making it the eighth-biggest exporter, but oil markets fear war would disrupt supply from other Middle East producers, which account for about 40 percent of globally traded crude.

U.S. officials said Wednesday that Saudi Arabia, the world's biggest exporter, had agreed to increase crude production by 1.5 million bpd if Iraqi exports were interrupted by war. The kingdom is already supplying extra crude to U.S. refiners to make up for the loss of Venezuela's exports.

With Iraq facing a U.N deadline Saturday to begin destroying its al-Samoud 2 missiles, chief U.N weapons inspector Hans Blix said Wednesday that Baghdad was still not fully cooperating on disarmament despite the recent handover of new documents.

Blix is preparing a written report to the U.N. Security Council assessing progress in the search for Iraq's alleged biological, chemical and nuclear weapons. Iraq denies it possess such arms.

President Bush continued to press his case for an invasion of Iraq, saying an end to Iraq's government would create an opportunity for peace in the Middle East.

He also said the United States would protect Iraq's oil from sabotage by the country's "dying regime." Iraqi President Saddam Hussein has accused the United States of pursuing war to gain control of his country's oil, a charge denied by Washington.