cbs.marketwatch.com By CBS.MarketWatch.com Last Update: 4:28 PM ET Feb. 27, 2003

TULSA, Okla. (CBS.MW) -- Williams Cos. announced Thursday that it's completed the sale of its retail travel center operations to Pilot Travel Centers for $189 million. EARNINGSWATCH Gap reverses year-ago loss, hits Wall Street target Gold prices drop to one-week low on stronger dollar Novellus holds first-quarter targets steady Univision sees Q4 topping views Free! Sign up here to receive our SiteWatcher e-Newsletter!

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The deal includes 60 travel centers and their working inventories in 15 states, Williams said.

The company (WMB: news, chart, profile), which is primarily engaged in the exploration, processing and transport of natural gas, said about 1,500 people were working for Williams TravelCenters when the transaction closed.

The former corporate office for the operations will remain open for portions of March and April for certain employees providing transitional services, Williams said.

The firm's only remaining retail petroleum assets consist of 29 convenience stores in Alaska. Those stores are up for sale under Williams' plan to divest its North Pole, Alaska refining operations.

Shares of Williams closed up 13 cents at $3.85.

Valero L.P. sees Q1 profit below target

Valero L.P. said Thursday that lower refinery runs would weigh on its first-quarter earnings.

The company (VLI: news, chart, profile), a master limited partnership 73-percent owned by Valero Energy (VLO: news, chart, profile), expects first-quarter earnings of 55 cents per unit, below the current average estimate of two analysts polled by Thomson First Call for a profit of 69 cents per unit.

The San Antonio owner and operator of oil pipelines said it continues to expect a sequential decline in average pipeline and terminal throughput levels due to lower refinery runs at certain facilities in January and early February.

Valero L.P. also cited reduced crude oil availability due to the oil worker's strike in Venezuela.

It expects pipeline and terminal throughput levels to return to normal levels for the remainder of 2003. The stock closed at $37.98, down 52 cents.

PG&E posts $2.2 billion loss in Q4

PG&E Corp. lost $2.2 billion in the fourth quarter, as revenue fell and operating expenses leaped 60 percent, the utility operator said Thursday.

PG&E (PCG: news, chart, profile) said it lost $5.75 a share, the result of $2.4 billion worth of asset impairments in the merchant power-generation unit of the PG&E National Energy Group. In the comparable period a year ago, the utility earned $520 million, or $1.45 a share.

See full story.

Oil prices ease back from 12-year high

Crude futures soared to 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.

The pull-back in prices also weighed on many oil company shares.

See Futures Movers and Energy Stocks.

www.forbes.com Reuters, 02.27.03, 3:29 PM ET

NEW YORK (Reuters) - NYMEX crude oil futures tumbled Thursday as profit-taking set in after an early attempt to crack the $40-a-barrel mark failed. Speculative funds led the sell-off in volatile trading, traders said, with the day's highs spurred by rising Iraq war fears and thin U.S. petroleum inventories. NYMEX April crude fell 50 cents, or 1.3 percent, to settle at $37.20 a barrel. April crude earlier soared $2.29 to $39.99, the highest level since October 1990 when NYMEX crude hit an all-time high of $41.15, just prior to the U.S.-led Gulf War to liberate Kuwait after an Iraqi invasion. A suspected squeeze on the April contract intensified volatility, traders said. "The market couldn't move past $40 and the sell-off began at that point... but remember $37 is still a very high price," said a NYMEX floor trader. NYMEX prompt crude oil prices remain more than 50 percent higher from mid-November levels, a premium built in amid growing fears of a war in Iraq. A strike in major U.S. supplier Venezuela and a very cold winter have also propped up prices. In London, April Brent crude settled 3 cents lower at $33.04 a barrel, moving $32.80 to $33.80. A U.S. move to lower its terror threat level helped pare oil's move higher, traders said. A delay until the weekend of the Turkish parliament's vote to allow the use of Turkish territory as a possible launchpad for military action against Baghdad was also bearish, they added. The market remained nervous amid tough talk on Iraq by President Bush, who on Thursday said any Iraqi plan to destroy banned missiles was part of "a campaign of deception." He called for Baghdad to disarm completely. "The discussion about these rockets is part of his campaign of deception," Bush said. "See, he'll say 'I'm not going to destroy the rockets, and then he'll have a change of mind this weekend and destroy the rockets and say, 'I've disarmed."' U.N. arms inspectors said the al-Samoud 2 rockets violate the 93-mile (150-km) range limit imposed after the 1991 Gulf War and called for Iraq to start destroying them by March 1. Bush's comments to White House reporters followed a speech on Wednesday in which he reiterated his intention to disarm Iraq, which the U.S. accuses of having weapons of mass destruction, with or without approval of the U.N. Security Council. Earlier on Thursday, an Iraqi official said Iraq would respond to U.N. chief arms inspector Hans Blix's order that Baghdad destroy its al-Samoud missiles. News that Iraqi Republican Guard troops and equipment were moving from their base in northern Iraq toward Baghdad raised concerns that Iraq was preparing for a U.S.-led attack. A divided U.N. Security Council on Thursday discussed a U.S.-British-Spanish draft resolution that lays the groundwork for war. France, Germany and Russia are pushing for more time for U.N. inspectors to search for Iraq's alleged weapons of mass destruction. No vote is expected for about two weeks. Saudi Ambassador to Britain Turki al-Faisal told BBC radio his country would not back a U.S.-led war in Iraq if there is no new U.N. resolution explicitly permitting the use of force. Meanwhile, OPEC Secretary-General Alvaro Silva said the cartel could cover any stoppage of Iraqi oil if war erupts and consumer countries need not release emergency reserves. On Wednesday U.S. officials said Saudi Arabia had agreed to increase output by 1.5 million barrels per day if Iraqi oil flow is interrupted by war. Temperatures across much of the United States and Canada are forecast to stay below normal through early March, Salomon Smith Barney meteorologists Jon Davis and Mark Russo said on Thursday. Ahead of Friday's expiration for March refined products contracts, NYMEX March heating oil settled 0.06 cent lower at $1.1543 a gallon, trading $1.125 to $1.1770. The April contract ended 0.58 cent down at $1.0601. NYMEX March gasoline ended 0.03 cent lower at $1.018 a gallon, moving 99.25 cents to $1.04. April gasoline finished up 0.27 cent at $1.0938. Copyright 2003, Reuters News Service

news.ft.com By Carola Hoyos Published: February 27 2003 19:29 | Last Updated: February 27 2003 22:58

Crude oil prices surged on Thursday to almost $40 a barrel in New York, a high not seen since just after Iraq invaded Kuwait in 1990. The $2 jump was fueled by concerns over a lack of US oil supplies ahead of an increasingly inevitable war with Iraq.

The jump, which affected the US benchmark West Texas Intermediate contract far more than its Brent Light London counterpart, proved short-lived, however, with prices retreating to the $37 range by the early-afternoon. One trader described the morning session as one of the “wildest rides” the energy futures market had seen in years.

Commercial stockpiles of US crude oil are smaller than they have been since 1976 and in the past week fell to the minimum 270m barrels needed to keep the US’s vast system of refineries, pipelines and storage tanks running smoothly.

Meanwhile, a cold winter gripping the US Northeast has cut stored heating oil to dangerously low levels, more than 30 per cent below the inventories available last year.

Washington has tried in vain to calm the recent jitters in the oil market by announcing that it would consider in case of a war with Iraq to release some of the 600m barrels of crude oil it stores for emergencies.

The Opec oil cartel has also tried to reassure markets, raising its output quota in January and promising to use spare capacity to cover a possible reduction of 2m barrel a day from Iraqi exports in the event of US military action in Iraq.

But the world faces supply interruptions not only from the Middle East.

George Beranek, analyst at PFC Energy, a consulting firm in Washington, says: “Invetories are low enough that the market really is working without a safety net, particularly in the US. If you have renewed problem in Venezuela or problems in  Nigeria in the run up to their April presidential elections, then you are going to have a serious problem very quickly.”     

The effect of the high oil price on the world economy will largely depend on the length of time it continues at current levels. For many countries, a major mitigating factor has been the recent drop in the value of the dollar, the currency in which oil is traded.   

“The real problem comes if these problems last a long time. One month should not be a problem, three months will have an impact in developing economies and 6-12 months it could be serious,” Mr Beranek says.

On the down side, the release of extra Opec crude and stockpiles held in storage in Europe, Japan and the US could also swamp the market. Prices could drop to well below $20 a barrel if a short war in Iraq causes little damage to the country’s oil fields and the worries about oil supply interruptions in countries such as Venezuela and Nigeria prove unfounded.  

www.heraldsun.news.com.au This story is from our news.com.au network Source: AFP 28feb03

OIL prices have rocketed up to almost $US40 ($65.90) a barrel in New York for the first time since the 1990-91 Gulf War. Benchmark light sweet crude for April delivery surged more than $US2 to $US39.99 in late morning trade, a level not seen since October 1990 in the wake of the Iraqi invasion of Kuwait.

It later fell back to $US39.25 a barrel, still up $US1.55 from the previous close.

Traders chased prices higher on fears that a war in Iraq could be just around the corner, threatening disruption to Middle East supplies, while US oil stocks are close to a 27-year low.

"A potentially supply-disruptive war may begin at any moment," said Mike Fitzpatrick, an oil trader at Fimat USA in New York.

The price of reference London Brent North Sea crude for April delivery rose to $US33.20 in late trading from $US33.07 at the close of the previous session.

"Crude oil inventories remain about as low as they possibly can be in the States and then you throw in on top of that the geopolitical concerns and you've got the recipe for crude moving up towards $US40," said JP Morgan analyst Paul Horsnell.

"In terms of the key oil products, we're just running out."

Analysts said the decision taken last month by the Organisation of Petroleum Exporting Countries (OPEC) to pump more oil to compensate for a strike in Venezuela had come too late too quell a price spike.

"We had always warned that the market was on a knife-edge: additional crude supplies were expected to arrive in the coming weeks, but it was unclear whether they would arrive in time to prevent a squeeze in prices," said GNI-Man Financial analyst Lawrence Eagles.

"They did not. The squeeze is now well and truly under way, underpinned by cold weather demand and a surge in natural gas prices."

The market found little solace in comments from the OPEC oil cartel reassuring consumers it had four million barrels of spare capacity available to avert supply shortfalls and would not use oil as a weapon if war broke out against Iraq.

OPEC Secretary General Alvaro Silva Calderon "talked about having 4 million barrels a day of spare capacity and nobody really believes that", said Horsnell.

"I think JP Morgan is more optimistic than most on how much spare capacity there is within OPEC and we don't think there's much more than two (million bpd) left and there are others who have lower numbers than that.

"There's not really an awful lot the OPEC secretary general can say at this point to drag things down too quickly."

www.vheadline.com Posted: Thursday, February 27, 2003 By: Patrick J. O'Donoghue

Former Petroleos de Venezuela (PDVSA) manager Mireya de Amaya admits that it has been difficult to keep up the community fund to help employees and workers sacked by the government in the course of the oil sector stoppage that nearly crippled the economy.

The fund increased after friends and people close to the sector deposited donations in a trust fund.

"Given the size of the dismissals, we are now calling on all Venezuelans and companies to contribute … the total amount received so far is 930 million bolivares.”  Aid consists of economic help of between 150,000-200,000 bolivaries, food basket or health care.

According to de Amaya, dismissals are around the 16,000 mark … "15% belong to the day payroll, 80% the greater payroll and 5% executive … 60% of the greater payroll include lower economic levels such as supervisors, foremen and the like.”