www.theage.com.au Thursday 27 February 2003, 17:05PM

Oil prices have surged to their highest level since the Gulf War and could easily surpass $US40.00 a barrel, analysts said.

"Crude stocks are low and when you get problems in a major producing region such as Venezuela and potential problems in the (Persian) Gulf, another huge producing region, there is only one way prices can go," Commonwealth Bank of Australia chief commodity strategist David Thurtell said.

Overnight oil prices hit a new post Gulf War high of $US37.90 ($A62.63) a barrel, up $US1.84 and within reach of the record $41.15 hit in October 1990.

London Brent crude gained 76 cents to $33.08 a barrel.

Driving prices higher was a United States government report revealing a big drop in winter heating fuel stocks as the Bush administration continues to prepare for a possible war against Iraq.

As parts of the US endure a colder-than-normal winter, supplies of heating oil in the week to February 21 fell 3.9 million barrels to 36.1 million barrels, a 33 per cent deficit from a year ago.

The crisis in Venezuela, a major supplier to the US market, has also placed pressure on US inventories.

"It has been a fairly cold winter in the US and that has led to a big demand for heating oil," Mr Thurtell said.

"The problem with that is a big source of supply to the US has been Venezuela and there has been a strike in Venezuela."

Mr Thurtell said that on top these "real" elements impacting oil prices, the market had factored in the possibility of war against Iraq.

"Potentially there is a huge disruption of shipping in the Gulf.

"That is the fear factor and you have those real factors."

Despite expectations that oil prices will strengthen in the short term, shares in leading Australian oil and gas producers Woodside Petroleum Ltd and Santos have reacted indifferently.

At 1503 AEDT, Santos was one cent firmer at $5.83 while Woodside had slumped 22 cents to $10.64.

"It (Woodside) may have something to with their looming production gap but it is hard to know (why the stock has fallen so sharply)," Deutsche Bank energy analyst John Hirjee said.

www.gopbi.com By Joe Capozzi, Palm Beach Post Staff Writer Thursday, February 27, 2003

JUPITER -- When the University of Miami's Adam Ricks grounded out in the first inning, it might have been the most exciting play for the Marlins in their 5-1 victory Wednesday.

It might have been the only play that shortstop Alex Gonzalez made in his two innings, but it was his first action with the Marlins since May 18, when he dislocated his shoulder while trying stop a Barry Bonds base hit.

"He looked like he hardly touched the ball,'' manager Jeff Torborg said of Gonzalez's smooth play Wednesday.

At least for now, Gonzalez won't be making any diving plays. The Marlins don't want him to take any chances.

"I feel like 97 percent, not 100,'' Gonzalez said. "I don't have any pain in my shoulder. I worked hard in the off-season. I've come back to spring training and will look to play the whole season healthy."

After missing most of last season, Gonzalez, 26, is on pace to be the Marlins' opening-day starter. But his comeback is about more than an injury.

The native of Venezuela has been trying to rebound from a slump that started after he appeared in the 1999 All-Star Game -- he has hit.233 since.

While he struggled offensively, he also committed 75 errors from 1999-2001 -- including 26 in 2001, a major-league high for shortstops. But he made only three last year in 199 chances before he went on the disabled list.

"In the six weeks he was playing, Alex was the best-fielding shortstop in the National League," Marlins infield coach Perry Hill said.

Gonzalez had surgery July 23 after a failed rehab assignment with the Gulf Coast League team. The Marlins hoped he could return after he went on the disabled list in May, but it was too painful for him to swing a bat.

"He's worked his tail off,'' Torborg said. "He tried to do it without surgery, but couldn't get it done. He had to start over."

Gonzalez is expected to bat eighth. He hit.225 (34-for-151), with two home runs and 18 RBI last season.

"He doesn't mess around on how he plays defense," Torborg said. "The other part will take time."

joe_capozzi@pbpost.com