www.sfgate.com Wednesday, March 12, 2003
(03-12) 18:13 PST MEXICO CITY (AP) --

Mexican stocks trimmed losses in the last leg of trading Wednesday but still closed lower for the fifth session in a row, as poor sentiment over geopolitical issues continued to drag share prices into negative territory.

The market's key IPC index closed down 11.13 points, or 0.2 percent, to 5,809.97 points. At the end of 2002, the IPC stood at 6,127.09.

Volume was a modest 60.1 million shares worth 723.5 million pesos, compared with Tuesday's 58.5 million shares worth 801 million.

Among individual issues, market bellwether Telmex L shares closed down 7 centavos, or 0.4 percent, to 15.76; while its wireless sister company America Movil L shares fell 12 centavos, or 1.6 percent, to 7.45.

Advancers include construction concern ICA nominal shares, up 7 centavos, or 4.1 percent, to 1.76. Wireless phone carrier Iusacell V shares hit a record low Wednesday, dropping 1 centavo, or 2.9 percent, to 34 centavos.

BUENOS AIRES, Argentina (AP) -- Argentine stocks continued their losing streak Wednesday, led by a large decline in market leader Perez Companc, which late Tuesday reported a loss for the fourth quarter.

The decline of 2.87 points, or 0.5 percent, in the large-cap Merval Index to a close of 554.78 followed a 0.7 percent slide Tuesday and a 3.5 percent drop Monday.

A slightly more stable performance Wednesday in world markets, whose recent declines had started to weigh on Argentine stocks, may have helped stabilize local markets a bit but the overall tone remained weak, with uncertainty ahead of April elections beginning to play a role.

Perez Companc shares led the market lower, declining 3.4 percent to 2.25 pesos.

Banks were mixed Wednesday, with Banco Frances losing 2.3 percent to close at 4.30 pesos, but Banco Galicia rose 0.4 percent to close at 0.698 while Bansud was unchanged at 1.30.

The broader General Index was down 43.61 points, or 0.2 percent, at 26,775.60 points. Volume was a thin 26.7 million.

SANTIAGO, Chile (AP) -- Share prices on the Santiago Stock Exchange closed slightly higher in light trade Wednesday as investors remained wary about the possible effects of a new financial sector scandal.

Chile's blue-chip Ipsa index closed up 0.6 percent at 1,018.85 points, while the narrower Inter-10 index of more liquid, internationally traded Chilean shares rose 0.3 percent to 101.18, and the broader IGPA index ended up 0.3 percent at 5,070.99 points.

Volume fell to 7.1 billion pesos from 7.70 billion posted in the previous session.

Electricity Holding Enersis ended unchanged at 57 pesos and subsidiary Endesa ended up 0.8 percent at 182. Both firms announced Tuesday that they reached a deal with four local banks for a syndicated loan worth US$2.30 billion as part of a debt restructuring plan.

Retailer D&S rose 1.2 percent to 420 and telecommunications company Entel ended up 1.7 percent at 3,080.

CARACAS, Venezuela (AP) -- Venezuelan shares ended mostly unchanged Wednesday with the IBC General Stock Index closing at 8,177 points, up about 0.02 percent.

The market's biggest stock, telephone giant CA Nacional Telefonos de Venezuela, ended at 2,303 bolivars per share, up three bolivars in trades worth roughly US$12,000.

The company's American Depositary Receipts, worth seven common shares apiece, were down 0.73 percent at US$9.47 each in late afternoon trade on the New York Stock Exchange.

www.nytimes.com By BLOOMBERG NEWS

ASHINGTON, March 12 (Bloomberg News) — The trade deficit narrowed in January from a record as Americans bought fewer foreign-made goods in a slowing economy and exports rose, the Commerce Department reported today.

The trade gap in goods and services was $41.1 billion, trailing only a revised $44.9 billion deficit in December, the department said. For all of last year, the deficit reached a record $435.7 billion.

Growth forecasts are slipping as consumers rein in spending and business investment is stagnant, suggesting that Americans may buy fewer imported goods. Economic growth may ebb this year to 2.3 percent from 2.4 percent in 2002, a U.C.L.A. study said. In February, manufacturing slowed, 308,000 jobs evaporated and consumer confidence reached a nine-year low.

"We will see less inventory building in the first quarter and therefore fewer imports," given the prospect of war with Iraq and the slowing economy, said Elisabeth Stoegmueller, a Dresdner Kleinwort Wasserstein economist in New York who projected that the deficit would narrow to $41.5 billion. "It comes down to final demand in the end, and that is just not picking up yet."

Imports fell 2 percent in January, to $123 billion, led by declines for autos and consumer goods, while exports rose 1.6 percent, to $81.9 billion, helped in part by a weaker dollar. The dollar has fallen 26 percent against the euro and 9 percent against the yen in a year, making American goods less costly relative to European and Japanese products.

Economists had forecast a deficit of $43.4 billion compared with $44.2 billion in December.

Imports of autos and parts dropped 4.9 percent in January, to $16.8 billion. Americans bought 3.9 percent less in imported consumer goods, and companies spent 1.1 percent less on capital goods like telecommunications equipment and computers.

Rising oil prices, spurred by political discord in Venezuela and war expectations in the gulf region, pushed the value of petroleum imports to $7.4 billion from $7 billion the previous month. The price of oil surged nearly 15 percent, and the number of barrels imported fell to 268.4 million from 289.3 million as Venezuelan exports dropped.

Shipments abroad of consumer goods rose 6.9 percent in January, to $7.4 billion, led by a surge in pharmaceuticals. Foreign companies bought 2.5 percent more capital goods.

www.nytimes.com By BLOOMBERG NEWS

Crude oil futures closed at a 12-year high yesterday, for the third time in the last two weeks, after the Energy Department reported an unexpected decline in inventories.

Supplies of crude oil last week fell 1.4 percent, to 269.8 million barrels, the department said. Inventories were 16 percent lower than they were a year earlier and close to a 28-year low. Analysts had expected an increase. The decline came as the United States appears headed for a war in Iraq, which pumps about 3 percent of the world's oil.

"This is a big problem," said John Kilduff, senior vice president for energy-risk management at Fimat USA in New York. "You don't want to have low oil inventories when the country is about to go to war."

Crude oil for April delivery rose $1.11, or 3 percent, to $37.83 a barrel on the New York Mercantile Exchange, registering the highest closing price since Oct. 16, 1990, when the Iraqi occupation of Kuwait cut off exports from both countries.

Prices reached $39.99 a barrel during trading on Feb. 27, the highest intraday price since October 1990, when futures rose to a record $41.15.

In London, the April Brent crude-oil futures contract rose 62 cents, or 1.9 percent, to $33.91 a barrel on the International Petroleum Exchange.

Crude oil imports fell 12 percent, to 7.62 million barrels a day in the week ended March 7, the weekly report on petroleum inventories, production and imports said.

"This is as bad as it gets," said Ed Silliere, vice president for risk management at Energy Merchant in New York, which markets gasoline and heating oil to local distributors. "Supplies are very tight."

Analysts had expected that increasing imports from Venezuela and Saudi Arabia would send inventories higher. A strike in Venezuela had been limiting shipments to the United States.

Venezuela pumped about 3 million barrels of oil a day before the strike began in December and now is pumping 2.7 million barrels a day, according to the Venezuelan government. Striking oil workers say production is closer to 1.9 million barrels a day.

www.kansascity.com Posted on Wed, Mar. 12, 2003 SUSANNAH A. NESMITH Associated Press

BOGOTA, Colombia - Colombia and several neighboring nations signed an accord to Wednesday to work together to fight terrorism and drug trafficking.

But the agreement did not specify how the nations would cooperate especially in Colombia, the world's principal producer of cocaine and site of violent insurgencies.

Colombia is fighting a 38-year war against several rebel and paramilitary groups, most of them financed through drug trafficking.

Colombian officials, who have complained that the rebels and their paramilitary rivals have found refuge in neighboring countries, and are hoping that now neighboring borders will be closed to them.

A senior U.S. official said the agreement - signed by Colombia, Peru, Bolivia, Venezuela, Ecuador, Brazil and Panama - represented a turning point in regional relations.

The official, who spoke on condition of anonymity, said Colombia's neighbors have in the past refused to help fight the leftist rebels, right-wing militias and drug rings.

"Now they've recognized it as a transnational problem," the official said.

edition.cnn.com Thursday, March 13, 2003 Posted: 0019 GMT ( 8:19 AM HKT)

LONDON (Reuters) -- Spare OPEC oil production capacity has been squeezed to just half the volume of Iraq's exports, exposing world energy markets as war looms, the International Energy Agency said on Wednesday.

In its monthly Oil Market Report, the IEA said that production increases over the past two months had left effective spare capacity in OPEC at just 900,000 barrels per day (bpd) on the global market of 78 million bpd.

"This is less than the potential loss of supply in the event of war in Iraq," said the Paris-based IEA, adviser on energy to 26 industrialised nations.

The IEA report calls into question OPEC's claims that it has some 3 million bpd to hand in case of a U.S. attack.

Iraqi supplies, running at 1.7 million bpd over the past month, are expected to shut should the United States launch an assault against Baghdad. In addition, Kuwait has said it may need to suspend as much as 700,000 bpd as a safety precaution during war.

"The market is heading into a period of heightened uncertainty with low stocks and limited spare production and shipping capacity," the IEA said.

It said commercial petroleum inventories among its member countries had been eaten away during a cold winter snap in North America.

"Industry oil stocks are tight and trending around minimum operating levels in key markets," the agency said. "A further supply disruption would tax a system operating at close to capacity."

Worries about low inventories helped push oil prices sharply higher on Wednesday. U.S. light crude for April jumped $1.11 to close at $37.82 a barrel.

Prompt action promised

The Organization of the Petroleum Exporting Countries agreed at a meeting in Vienna on Tuesday to keep production limits unchanged for the time being and said in a communique it would take prompt action if needed to ensure stable supplies.

Most of OPEC's spare capacity is held by its biggest producer Saudi Arabia, but the IEA disputed Saudi claims to be able to pump 10 million barrels a day straight away.

The agency projected Saudi capacity at 9.5 million bpd in the second half of March, giving it just 400,000 bpd spare.

Riyadh was likely to lift capacity to 9.7 million bpd in April and 10 million bpd in May, it forecast, but still short of the 10.5 million bpd Saudi says it can pump at 90 days notice.

The IEA report said OPEC's spare cushion had shrunk from 3.3 million bpd in November. It estimated production rose by 1.5 million bpd in February to 27.18 million as Venezuela restored output after a strike and others opened the taps.

The IEA has said it will allow OPEC to try to cover any shortages in war before it considers, as a last resort, releasing inventories from emergency stockpiles held in consumer nations. The agency has the power to order a release from the mandatory reserves of crude and petroleum products.

Strategic stocks built up by the IEA after the 1974 Arab oil embargo were last used in the 1990-1991 Gulf crisis after Iraq's invasion of Kuwait.