allafrica.com Vanguard (Lagos) March 11, 2003 Posted to the web March 11, 2003 Emeka Anaeto With Agency Report

AMID speculations that spare production capacities are not substantial enough to stabilise global oil market following the the current gulf crises , The Organisation of Petroleum Exporting Countries (OPEC) is meeting today in Vienna to weigh its options . The meeting is also coming at the backdrop of rising oil prices and slumping oil inventories. The cartel will "see what measures are needed to offset a shortage if there is a military strike in Iraq", an OPEC source said on Friday. Although production quotas are expected to be in the focus, analysts said OPEC will have little room for maneuver at its latest quarterly conference on output policy, given that spare production capacity is relatively small.

"With oil storage levels still sitting well under normal, crude prices well over 30 dollars and the cartel's spare capacity limited almost entirely to just Saudi Arabia, production quotas have effectively been suspended," said a research note by Merrill Lynch Director of Energy Research Michael Rothman. Analyst George Beranek at PFC Energy, a Washington-based consulting group, also noted the divergence between quotas and actual production. "Production is what the market looks for, so at the moment any change in quotas would have little effect," he said. "The question is, do they just agree to disregard the quotas, or formally suspend them?" The price of benchmark Brent crude has soared more than 10 dollars since mid-November, a rise of over 40 percent - as a crippling 63-day strike choked off Venezuela's output and traders speculated on the prospects of rising prices resulting from any war with Iraq.

OPEC raised its collective output quota from 21.7 million barrels per day to 23.0 milloin bpd in January, and again to 24.5 million bpd in February, in a bid to rein in prices. But the quota hikes had little impact, partly because actual output by the group's members already exceeded the quotas, analysts said. OPEC's stated aim is to keep oil prices based on a basket of seven crudes within in a range of 22 to 28 dollars per barrel. But the price of OPEC's basket has stayed well above the cartel's upper target of 28 dollars a barrel since mid-December 2002, while US reference light sweet crude recently hit a 12-year high of almost 40 dollars in New York. With a possible war threatening to cut off Iraq's output of 2-2.5 million bpd, attentions have turned to the ability of other producers to make up any shortfall.

But most member countries are already pumping at or near capacity, leaving only OPEC giant Saudi Arabia in a position to boost production significantly, having already increased output from just over eight million bpd in December to 8.95 million bpd last month, according to industry estimates. Lawrence Eagles, an analyst at brokerage GNI-Man Financial said the latest survey of OPEC production pegged output including Iraq at 27.21 million bpd, up 1.56 million bpd since January. The US Department of Energy estimates that OPEC countries excluding Iraq and Venezuela hold between 2.1 and 2.5 mln bpd of excess oil production capacity that could be brought online.

"This is the second lowest spare capacity level in the past three decades, trailing only the low reached in 1991 after the loss of Iraqi and Kuwaiti production," it said in a study published last Thursday. But analysts said the group is likely to continue ascribing current high oil prices to speculation about war with Iraq, rather than to extremely low global oil inventories. "We suspect that there will be some commentary that current crude prices are largely a function of factors 'beyond OPEC's control', such as speculation about supply security because of a war against Iraq," Merrill Lynch's Rothman said. OPEC secretary general Alvaro Silva Calderon said last Wednesday that the threat of war was pushing up oil prices, but that there was no shortage of supplies of oil to the market. "There is not a lack of oil," Calderon told reporters on the sidelines of an international energy conference in Brussels. "The problem with high prices is the threat of war, and the war is out of our control," he said.

www.southeasttexaslive.com DAN WALLACH , The Enterprise 03/11/2003

Truck drivers are fond of saying that if something isn't growing, it was brought there by a truck.

BEAUMONT - Truck drivers are fond of saying that if something isn't growing, it was brought there by a truck.

It takes fuel to get a truck from one place to another.

The direction that prices at the fuel pump will take in the next several weeks also will determine whether the prices of consumer goods and services will begin to climb, too.

"We're biting the bullet right now," said Jake Mazzu, owner of a produce business that supplies restaurants and food stores.

His company operates a fleet of 20 vehicles that buzz across Southeast Texas on multiple trips Monday through Saturday.

"If gas goes to $2.50 a gallon, we'll have to limit our runs. Instead of constantly going back and forth, we'll have to combine or limit trips."

Mazzu said he is not imposing a fuel surcharge on his customers.

"In lieu of going up on our customers, I'm doing the best I can to make little cuts," Mazzu said.

Typically, Mazzu said his gasoline bill runs anywhere from $2,000 to $2,500 per week. But current prices - about $1.52 to $1.59 at most pumps in the Beaumont area - sent his weekly bill to about $3,000.

"If we have a war, and we can get oil from somewhere else, it might back off a little," he said. "But it might go to $3 a gallon. The uncertainty is more of a problem now."

Roy Steinhagen, president of Steinhagen Oil Co., which runs convenience store-filling stations in Southeast Texas, shares Mazzu's feeling of uncertainty.

"We're at the mercy of suppliers," he said. "The effect of the war is unknown. Venezuela is an unknown."

The United States is poised to invade Iraq to depose Saddam Hussein, adding volatility to one of the most unstable regions in the world.

Political unrest in Venezuela, another major supplier of crude for the United States, also has reduced that supply, which has cut domestic inventories.

"We've had no trouble getting supplies," Steinhagen said. "Costs have been basically stable for the past couple of weeks. When futures go up, ours will go up accordingly."

He referred to the futures market at the New York Mercantile Exchange where prices for delivery in the coming months have shot up dramatically in the past few weeks.

"There are too many variables to crystal-ball it," Steinhagen said.

Supermarkets are a place where consumers could begin to see higher prices in case pump prices begin to spike upward.

For now, however, a major national chain and a local chain are standing pat on prices.

"Our diesel purchases are locked in for a number of months," said Kroger Food Stores spokesman Gary Huddleston.

"The marketplace is so competitive, it absorbs some of that," he said. "In the long-term, you could see an impact. But so many factors affect the long-term."

At Market Basket Food Stores, headquartered in Nederland, spokeswoman Caira Franz said that chain has no plans to increase its prices to cover the higher costs of transportation to bring in groceries and other goods.

"We're not noticing any difference in pricing yet," she said. "That's good news."

It isn't just motor fuel prices that have risen steeply, either. Natural gas also hit a peak recently, nearing historic highs.

Bill Munro, president of Munro's Dry Cleaners, said his natural gas costs to run his boilers are running 60 percent more than he usually pays.

"This started about four months ago, and peaked this month," he said. "You can't pass it along for the short-term to the consumer. You've got to bite the bullet. But if things stay the way they are - another 60 days - we'll probably start passing some of it along."

Reach this reporter at: (409) 833-3311, ext. 450 dwallach@beaumontenterprise.com

www.fool.com By Jeff Fischer (TMF Jeff) March 11, 2003

At some point, who hasn't dreamed of being an oil sheik? They control much of the world's most sought-after commodity, next to money itself. You could buy an island and blanket it with private jets and swimming pools, just because.

Today, members of the Organization of  Petroleum Exporting Countries (OPEC) suggested that oil output is adequate, and it will not support suspending output quotas. What OPEC didn't admit is that quotas are partly being ignored anyway, as countries "pump up the volume" in order to take advantage of today's crude oil prices before the spring thaw. 

At $37 per barrel, oil is near the $41 record high reached during the 1990-1991 Gulf War. But war drums aren't the only problem. From December to February, oil production in Venezuela tumbled from 3.1 million barrels per day to 1.4 million in politically motivated work stoppages. A war in Iraq might add to the decline in production.

The world consumes 77 million barrels of oil daily, and OPEC supplies 24.5 million, or 32%. Iraq supplies 1.7 million barrels per day. Oil fields in Kuwait producing 700,000 barrels daily would be closed in the event of war, meaning between Iraq and Kuwait, 2.4 million barrels per day would be lost. Whether this shortfall can be replaced by OPEC is hotly debated.

Saudi Arabia said OPEC can make up the shortfall if need be, while OPEC's president said the 11 member countries have capacity to produce an additional 3 million to 4 million barrels per day. However, the U.S. Energy Administration claims OPEC's on-demand spare production capacity is only 2 million barrels daily, and some suggest it's much less than that.

The U.S. Strategic Petroleum Reserve hugging the Gulf of Mexico holds 700 million barrels of crude oil, the largest emergency reserve in the world. In 1990-1991, the reserve was tapped to restrain prices during the Gulf War. Today, as U.S. gasoline prices hit record highs, the Bush administration suggests we're not in a supply emergency yet. The U.S. consumes more than 20 million barrels of crude oil daily.

www.europemedia.net 11/03/2003 Editor: Leigh Phillips

Italian mobile operator Telecom Italia Mobile (TIM) has reported an increase in net profit E1.165bn, or 22.6 per cent.

The operator had a one-off charge of E1.41bn for the write-off of its holding in Aria IS-TIM, a Turkish mobile operator, as well as for the write-downs for the company’s shares in Digitel Venezuela and Maxitel Brazil.

The company made gains over the course of the year by selling off its holdings in Bouygues Télécom, Mobilkom Austria and Auna, a Spanish operator.

Excepting all this, the company said its profits would have grown by 19.3 per cent, posting profits of E10.87bn for 2002, an increase of six per cent on 2001.

As of December 31, 2002, the TIM group had 39.1m mobile subscribers, an increase from last year of 12.2 per cent.

www.vheadline.com Posted: Tuesday, March 11, 2003 By: Kira Marquez Perez

Date: Tue, 11 Mar 2003 15:54:29 +0100 From: Kira Marquez Perez marquez@uni-duesseldorf.de To: Editor@vheadline.com Subject: Venezuela's "Friends"

Dear Editor: Two articles that were published in July last year in the newspapers El Nacional and Ultimas Noticias referred to the intentions of the United States to open a “transition office” in Caracas for “strengthening democracy in Venezuela.” These statements were put out by Mr. John Law (press representative of the US Embassy in Caracas) only a few months after the USA had supported a coup-d'etat in Venezuela.

Several months later, some countries joined to form the famous “group of friends of Venezuela” that has attracted a great deal of our attention, because of the particular nature of some of these “friends.”

Actually, one of the most important bases of a good friendship is trust ... but ... is it really possible for us Venezuelans to trust the Spanish and the North American governments after they supported a dictatorship in our country less than a year ago?

Can we really believe that they are interested in our well-being and in strengthening our democracy?

Probably they are … but that’s hard to believe.

Furthermore, the actions that these two governments have been leading in some of the latest international affairs are absolutely contrary to peace, democracy and freedom. Verbal aggression and threats coming from the White House (particularly from Mr. Rumsfeld, Mr. Bush and Mr. Powell) have become usual each time a country -- be it France, Germany, Russia or any other -- expresses its disagreement with beginning of an unjustified war in Iraq.

I can recall similar attacks and threats to Venezuela's government ... which took place before April last year ... when Mr. Powell “suggested” President Chavez should “change his attitude” ... just because he had made the statement: “you can’t fight terrorism with terrorism” when asked about the war in Afghanistan.

I agree with that.

You can’t just go and kill thousands of innocent people (including civilians and among them children) with the excuse “we are fighting against terrorism,” especially when the terrorist (in this case Bin Laden) comes out of the whole thing without even a wound.

By the way… let me remind you that both Bin Laden and Saddam Hussein were created and financed by the USA a few years ago … so we have to thank USA politicians for the existence of these two infamous personalities.

Millions of persons all over the world disagree with the martial intentions of US president Bush.  By the way, he won the elections in his own country under "really unclear circumstances" and that makes us doubt about which democracy is more legitimate, considering that our President: Mr. Chavez (who is permanently being criticized by Mr. Bush), has won several elections in Venezuela with a clear and vast majority.

However, Venezuela's “friend” Mr. Bush together with Mr. Aznar (another of our “friends”) and Mr. Blair, knowingly ignore public opinion and even intend to ignore UN decisions concerning the war against Iraq. In the case of Mr. Blair, only 15% of the British people support him in his war intentions and some personalities in his cabinet have even threatened to step back in case a war takes place without UN support … but… he doesn’t care. He obviously wants the oil in Iraq, and that's all that matters.

Last week, a man was put in jail in the USA for entering a mall with a t-shirt bearing the phrase: “Give peace a chance.” Additionally, some Hollywood stars, such as George Clooney, Richard Gere and Susan Sarandon have openly expressed their anti-war position and have been strongly criticized by the US government and even denounced that the US media has decided not to present their anti-war advertisements.

The situation is so bad that it is unclear if Richard Gere is going to be able to attend the Oscar Awards this year, and that although his film “Chicago” is one of the favorites…

In Spain, Mr. Aznar has recently closed a Basque newspaper and has led several persecution actions against the Basque people … so I ask myself: Is this the type of democracy that Mr. Bush and Mr. Aznar want to introduce in Venezuela?

Everybody knows that the US government has tried everything to obtain support for the war against Iraq: they have threatened France and “suggested” this country not to use its UN veto; they have intervened telephones and email accounts of members of some other UN delegations, such as Chile, in order to spy on them and find out what their position is; they had previously attacked the anti-war position of other countries, such as Germany (with threats, of course) and they had also tried to influence the decisions of some weaker countries, such as Bulgarian and Poland. Their main objective was to create uncertainty and division in the European Union (EU), because we all know that the USA is not really happy about the fact that a counter-part (a quite strong one, by the way) is being formed in Europe, so they have decided to use their well-known destabilizing tactics ... which we in Latin America know quite well, don’t we? The deteriorating economic situation in the USA and the weakening of the dollar against the euro are making Mr. Bush nervous.

However, I believe that the worst action that the USA could make would be to ignore the UN decision on the war ... that would really be derision against all of us, if we take into account that the USA has used the UN ... as well as its veto ... each time it has needed it.

The USA is the only country in history that has ever used atomic weapons (TWICE). In August 1945 (when World War II was practically over) hundreds of thousand of Japanese were victims of atomic attacks led by the USA. Some of the late effects of radioactivity are still present. Also, attacks on civilians in Germany with firebombs at the end of the war were totally unjustified at the time. In these attacks, hundreds of thousands of innocent people in the main cities of Germany (among them many children) were killed in the most terrible way: they were burned to death.

The US government has led many wars abroad. However, the USA has always been practically only an “observer” because these wars have always taken place “somewhere else,” in some other country, far away from the USA homeland.

When you look at a war in the TV it looks cool … like fireworks,  doesn’t it?

…but the reality is another one, and you can go to these countries and ask the people there.

Additionally, many nations in Latin America have been victims of invasions and coup attempts led by the USA ... among them I can mention: Puerto Rico, Mexico, Nicaragua, Panama, Colombia, Cuba, Honduras, Guatemala, Chile, Venezuela, etc.

The list of attacks led by the USA and England (and in many cases supported by Spain) is really endless: Vietnam, Yugoslavia, Argentina, etc…

So please ... What democracy are they talking about?

Kira Marquez Perez marquez@uni-duesseldorf.de