seattlepi.nwsource.com Friday, February 28, 2003 · Last updated 2:39 p.m. PT By BRUCE STANLEY AP BUSINESS WRITER

LONDON -- A recent surge in Saudi Arabian oil production should help cool sizzling prices when crude shipments from the Persian Gulf reach U.S. ports within a month, industry analysts said Friday.

Prices eased a day after spiking to a 12-year high in the United States on concerns about tight supplies. Some analysts said OPEC member countries were pumping furiously and argued that the current market turmoil would ease once these fresh barrels hit the market.

"A lot of the crude produced in January has not yet arrived. The situation may change drastically," said a senior source at the Organization of Petroleum Exporting Countries.

Fears of a war with Iraq are partly to blame for the latest run-up in prices. April contracts of U.S. light, sweet crude climbed as much as $2 on Thursday to peak at $39.99 a barrel in New York, the highest level since October 1990, when Iraq occupied Kuwait. On Friday, the April conrtract fell 60 cents to settle at $36.60 in New York.

In London, April contracts of North Sea Brent fell 25 cents to end at $32.79 a barrel.

Fears that a war might create supply shortages have inflated prices by at least $5 a barrel, said the OPEC source, speaking on condition of anonymity from the group's headquarters in Vienna, Austria.

However, analysts said OPEC could probably make up the 2 million barrels a day that Iraq would be unable to export if fighting broke out in the Gulf. OPEC supplies about a third of the world's oil.

The cartel's most powerful member, Saudi Arabia, says it can produce up to 10.5 million barrels a day. That is substantially higher than the 8.5 million barrels a day that the International Energy Agency, a watchdog for oil-importing countries, said the country was producing in January.

"I think they're well above 10 million barrels, and pumping," said Peter Gignoux, managing director of the petroleum desk at Salomon Smith Barney. Much of this additional crude is already on its way to the U.S. East Coast, a journey lasting about 45 days.

"There is a considerable amount of oil en route from Saudi Arabia," agreed Lawrence Eagles, head of commodity research for London brokerage GNI Ltd. Although it was unclear how many barrels were actually in transit, Eagles said the market would be "relatively balanced" if this fresh Saudi oil was counted as part of the global supply.

The United Arab Emirates and other OPEC members that aren't already producing at full capacity could boost the cartel's output further to help make up for any missing Iraqi barrels. "Altogether they can cover it - barely," the OPEC source said.

The recent price spike was most pronounced in the United States, the world's biggest importer of crude. While Iraq has been a factor in this surge, analysts said cold weather and the fallout from a strike in Venezuela's oil industry have played a bigger role.

"We've lived without Iraqi oil before. This doesn't bother me," Gignoux said.

Venezuela is steadily ramping up its production in the wake of a crippling strike. It has boosted exports from 700,000 barrels a day a few weeks ago to 1.4 million barrels today, and further increases are expected, Eagles said.

However, U.S. importers were slow to seek alternative sources of crude when the strike first disrupted Venezuelan exports in December. This slow response, together with the longer time it takes crude to reach North America from Saudi Arabia, has helped cause a temporary squeeze in the U.S. market, analysts said.

On top of the surge in crude prices, heating oil soared to historic highs this week as snow buried large parts of the United States.

"In my world of oil," Gignoux said, "I've seen chaos this week."

www.vheadline.com Posted: Friday, February 28, 2003 By: Patrick J. O'Donoghue

Red de Apoyo por la Justica y la Paz HR group director, Pablo Fernandez has warned government and opposition to get their act together if they don’t want to see a repeat of the February 27 (1989)  mass looting that gripped Caracas and ended with more than 200 deaths.

“The emphasis is on deep agenda and not immediate solutions ... conditions today aren’t the same as those which existed in 1989 … people are more organized today than they were then.”

Fernandez warns that if the State does not create suitable mechanisms to distribute wealth fairly and that respond to the population’s basic needs, then the gains earned during the current political process could be lost.

Criticizing the national stoppage, the HR leader comments that it was a great mover but now people haven’t assumed the consequences of their acts … "sectors used legitimate mechanisms, such as a stoppage but did not stop to measure the consequences.”

The State, on the other hand, has responsibilities that it cannot delegate but suffers from an enormous institutional weakness to provide answers to complex problems.

www.vheadline.com Posted: Friday, February 28, 2003 By: Patrick J. O'Donoghue

Human rights groups congregated yesterday at Candelaria Church for a religious service presided by Jesuit theologian, Pedro Trigo.

Cofavic HR group organized the annual commemoration and this year invited people, who are still waitingfor the State to clarify three “forced disappearances” during the Vargas State disaster and the families of April 11, 2002 victims.

Those attending the religious ceremony have condemned government or opposition attempt to make political capital out of 27F.

• 276 people officially died in the 27F massacre of civilians by the Armed Forces (FAN).

Father Trigo admits that it might be difficult to stop acts of injustice from being committed but the State must ensure that a rule of law does indeed exist.

PROVEA general coordinator Carlos Correa says the memory and tenacity shown by victims’ families attending the annual event are an important sigh for justice vis-a-vis a non-compliant State.

www.vheadline.com Posted: Friday, February 28, 2003 By: Oscar Heck

VHeadline.com commentarist Oscar Heck writes: I have been thinking about the recent bombings in Caracas ... the bombings of the Spanish and Colombian embassies/consulates.

Kira Marquez's observations and comments, in her recent letter to Vheadline.com: "AD and Copei have used terror tactics each time they've needed them throughout Venezuela's history " are quite interesting, and probably close to reality.

My questions are:

1. Why were the Spanish and Colombian embassies/consulates bombed (2 of the countries that appear to support the opposition) and not the USA embassy?  If the supposed "terrorists" were bent of "punishing" anti-Chavez embassies, the main target would have been the US embassy (the US is an obvious supporter of the opposition). This brings up another question. Who may have been involved in the bombings?

2. Why were there no deaths, serious injuries or massive destruction? (I was at the Colombian bombing site yesterday). It appears to me that "terrorists" seeking real "impact" would not think twice about making sure that the bombs caused serious damage ... especially if it were true that Chavez and company are affiliated with Osama Bin Laden, Saddam Hussein and Khadaffi (as the opposition so intently believes).

3. Why is the media and opposition so quick to find "evidence" linking the bombings to radical pro-Chavez groups? Planting information is a very easy task. Furthermore, where is the hurry to "blame" someone. How long did it take to find the person who bombed the buildings in Oklahoma city? Other embassies throughout the world?

Changing subjects, yesterday, I saw Carlos Fernandez speaking on television ... he said that he has never done anything illegal or criminal (referring to the charges against him), and that he is simply a political prisoner. I believe he made that statement in public to prepare the ground for his "escape" from Venezuela to a country (such as Spain) that will give him refuge.

If Fernandez manages to convince countries outside Venezuela that he is truly a political prisoner, then he can easily justify his escape from the Venezuelan justice!

• By the way, Carlos Fernandez  is not a political prisoner ... he is a criminal, who has committed treason and has incited people to lawlessness.

On another note, the opposition is continuously lamenting their economic situation. Yesterday, I was driving around some of the "richer" areas of Caracas (opposition territory): Country Club, Chacao, La Castellana, Altamira, Las Mercedes, etc. Every restaurant had tens of cars parked in front, and these are not cheap restaurants.  Shopping centers were full of people buying.

Another interesting subject: On Globovision recently, a representative from "Petroleum People" (one of the major PDVSA union groups headed by Juan Fernandez) was asked "how has the firing of the many PDVSA employees affected their families?"  I was surprised by her response, which was something to this effect "...well, it has affected them very negatively ... many of the people who have been fired have been living in homes owned by PDVSA ... and now that they're fired, PDVSA naturally wants to have them move out."

Oscar Heck oscarheck111@hotmail.com

www.vheadline.com Posted: Friday, February 28, 2003 By: Gustavo Coronel

VHeadline commentarist Gustavo Coronel writes:

In a recent letter from Daniel Burnett, comments on my editorial: "President's Chavez Bedside Manners."  Mr. Burnett and I have exchanged some messages before, and I find him very articulate and persuasive. However, we are not watching the same "ball game," he from New York and I from Venezuela.

Mr. Burnett finds Chavez "very funny" ("he had me rolling in laughter"). I consider him a clown. And so do the people of Maracaibo, where he went to give a speech and tried to talk in the regional accent of the locals. Not well accepted since presidential humor should not be at the expense of others. Presidents are Statesmen, not clowns. Mr, Burnett adds that he rather listens to Chavez than to Ortega. I say that the tasks of government are no oratorical tournaments. In fact, the less blah-blah the better.

Mr. Burnett makes two claims I strongly disagree with. One, that the "cadenas" on TV imposed by Chavez have been the result of the anti-Chavez propaganda in the commercial media. Two, that Chavez would be truly governing if it was not because of the opposition efforts to "overthrow" him. The truth is exactly the opposite. Chavez is a charlatan and he can not be stopped from talking. When he started his term he had the support of most sectors, including the media.

• The first Information Director of his government was Mrs. Otero, the wife of the Editor of "El Nacional". Otero was with him. Pena, the director of "El Nacional" was his Secretary to the Presidency. Gustavo Cisneros and VENEVISION were with him. TELEVEN likewise.

As Chavez started to abandon plural democracy and became intent in leading Venezuela the Cuban way, these people and many others who had supported him broke ranks. Chavez, Mr. Burnett, can not govern because he is an incompetent. Picking a fight with all sectors is the way to build up the excuse that you concede to him so generously.

Mr. Burnett rightly criticizes Chavez's vocabulary, except for the word "coupster," as applied to the opposition. The only real coupster we have had in Venezuela during the last 10 years has been Chavez, who led a bloody coup in 1992 against a democratic government, causing more than 100 innocent deaths.

This coup failed because he was a coward then.

Today, millions of Venezuelans want him out democratically ... not "overthrown" ... by means of an election which he has refused to accept. Gaviria and Carter have recommended this solution to him and he has rejected them as well. He says that "even if 99% of the people vote against me, I will not resign." How is this for democracy, Mr. Burnett?

For Mr. Burnett "Chavez is generally quite calm, composed and soft spoken during his speeches." Obviously we are not watching the same man. His words are invariable mordant, his manner vulgar, his way to deal with dissenters inconsiderate. He is no President but a person intent on promoting hate and resentment.

Mr. Burnett says that "the same people who made economic policy during the last half century are now leading the opposition". This is inaccurate.

Economists like Ochoa, Vivancos, Guerrero, Gustavo Garcia, Francisco Rodriguez, the leading current critics of the "Mickey Mouse" economic policies of Chavez are young people, not connected with past politics. On the other hand, Chavez' economic advisers are members of the pliocene generation: Maza Zavala, Mieres, Castellanos, Parra, Giordani, Bastidas, Vallenilla.

I must say that I respect Daniel Burnett's commentaries and opinions. He is sharp and very civilized. If he comes to Venezuela soon I would like to meet him personally and show him my version of the country.

Gustavo Coronel is the founder and president of Agrupacion Pro Calidad de Vida (The Pro-Quality of Life Alliance), a Caracas-based organization devoted to fighting corruption and the promotion of civic education in Latin America, primarily Venezuela. A member of the first board of directors (1975-1979) of Petroleos de Venezuela (PDVSA), following nationalization of Venezuela's oil industry, Coronel has worked in the oil industry for 28 years in the United States, Holland, Indonesia, Algiers and in Venezuela. He is a Distinguished alumnus of the University of Tulsa (USA) where he was a Trustee from 1987 to 1999. Coronel led the Hydrocarbons Division of the Inter-American Development Bank (IADB) in Washington DC for 5 years. The author of three books and many articles on Venezuela ("Curbing Corruption in Venezuela." Journal of Democracy, Vol. 7, No. 3, July, 1996, pp. 157-163), he is a fellow of Harvard University and a member of the Harvard faculty from 1981 to 1983.  In 1998, he was presidential election campaign manager for Henrique Salas Romer and now lives in retirement on the Caribbean island of Margarita where he runs a leading Hotel-Resort.  You may contact Gustavo Coronel at email ppcvicep@telcel.net.ve