english.peopledaily.com.cn Last updated at: (Beijing Time) Thursday, March 13, 2003

Along with more than 200,000 American soldiers gathering at the Gulf Area the US war against Iraq is now at a point of touch-and-go. At present, the worries induced by the US-Iraqi War has already effected a great impact on the world oil market, making the world economy in the course of recovery to confront a new pressure. Along with more than 200,000 American soldiers gathering at the Gulf Area the US war against Iraq is now at a point of touch-and-go. At present, the worries induced by the US-Iraqi War has already effected a great impact on the world oil market, making the world economy in the course of recovery to confront a new pressure. However, some persons in the US hold that once the war is kicked off the world oil price will see a quick downturn and the pressure exerted on the world economy will be alleviated along with it. Whether the prediction is correct or not has incurred doubts among many people of the world. History has really witnessed a surprising similarity. At present when the US is about to launch war against Iraq it has made the oil price to approach the price level as happened in the Gulf Crisis some 12 years ago. Those, holding the view that once the war begins the oil price will soon go down, do not mean that they have a loose tongue. In 1990 when Iraq intruded into Kuwait, causing the eruption of the Gulf War the world oil price had once shot to over US$ 41 per barrel. But when the multinational troops headed by the US launched the "Sandstorm" attack the oil price immediately went down, and to somewhere near US$ 25 per barrel not long afterwards. The problem is that the situation has changed and things are no longer what they were in the past. Can the "old calendar" of some 12 years ago be adaptable to the situation at present. This is really a very big question mark. Doubt 1, if the old calendar will spell any good lies in whether the supply and demand of the oil can be balanced quickly in the world. The discontinuation of the oil export from Iraq and Kuwait brought about last time by the eruption of the Gulf Crisis and international embargo immediately led to the daily reduction of 4.5 million barrels in world crude oil supply. To fill the gap, Saudi Arabia, world No.1 oil producing country at once increased its oil output, which witnessed a daily additional output of 3 million barrels in a very short time, thus making up the two thirds of the output losses in Iraq and Kuwait. And accordingly other countries also made efforts to make ensure the crude oil supply. For the moment, the average daily consumption of oil is 78 million barrels, an increase of over 15 percent as against that of 67 million barrels in 1990. But judging from the situation of the OPEC there is not much strength left for further exploitation since most of these countries are actually engaged in overexploitation of the oil production. Whereas some 12 years ago the surplus productivity of the OPEC countries reached 7.5 percent of the global oil-needed amount, but now this has been reduced to around 2 percent. Except the Saudi Arabia, the other countries see not much productivity left for increasing oil production while the restoration of oil exportation from Venezuela, one of the major oil-exporting countries in the world still needs sometime to manoeuvre. Doubt 2, whether the old calendar will work lies in the low oil reserve leading to the fragility of the market resistance to the fluctuation of oil price. Though the US, starting from the yearend of 2001 increased its strategic oil reserve the world reserve of the commercial oil in general is on the decrease. We've witnessed that the US commercial oil reserve has recently gone down to its bottom-line never occurred in a few years time before. According to the statistics provided by the "Wall Street Journal" the commercial oil reserve of the industry-developed countries saw a supply of some 65 days in 1990 but now it is reduced to 52 days only. Besides, presently we have seen come forth some complicated factors basically rare to have seen some 12 years ago, included in which are the worries brought about by the terrorist attacks. For example, the finely equipped and well-trained US navy has every capability to cope with any form of military attack from any of the Gulf countries. It is yet a question mark whether it is able to effectively put to stop any terrorist activity by an ordinary way on the oil shipping-line. The US warship and the French oil tanker have in recent years been confronted with the terrorist destruction by small vessels in a suicidal way. This is a new problem the western countries are faced with after the "9.11 Incident". Whether the old calendar can spell any good for, or whether it can be fully applied to the new reality that we are facing today is a new ordeal brought about and put before the US military attack on Iraq by the world oil market. It is also a question of great importance that deserves close attention of the world. By People's Daily Online

www.channel4.com Published: 13-Mar-03; 08:02 By: ITN

Oil prices have jumped more than a dollar as the US reported a fresh fall in fuel stocks, leaving little supply cover for looming war in Iraq.

US April light crude futures climbed $1.11 to $37.83 a barrel, below its recent peak of $39.99. Oil prices set a record high of $41.15 a barrel during the 1990-91 Gulf crisis.

In London benchmark Brent futures rose 62 cents to $33.91 a barrel.

Oil prices are up 20 per cent this year on concerns that a war in Iraq could upset oil supplies from the Middle East.

Prices eased briefly yesterday after the Organisation of the Petroleum Exporting Countries (OPEC), which controls over half of world crude exports, pledged in Vienna to ensure adequate supplies for nervous oil markets.

Saudi Arabia has raised production sharply since the start of the year to make up for supplies lost from Venezuela during a two-month workers' strike.

But the International Energy Agency, adviser on energy to 26 industrialised nations, said OPEC's spare oil production capacity had been squeezed to just 900,000 bpd following the recent production increases.

"This is less than the potential loss of supply in the event of war in Iraq," said the Paris-based IEA in its monthly Oil Market Report.

Iraqi output, running at 1.7 million bpd over the past month, would be expected to be halted in the event of war. In addition, Kuwait has said it might need to suspend as much as 700,000 bpd as a precaution.

"The market is heading into a period of heightened uncertainty with low stocks and limited spare production and shipping capacity. A further supply disruption would tax a system operating at close to capacity," the IEA said.

www.fortwayne.com Posted on Thu, Mar. 13, 2003 HAMZA HENDAWI Associated Press

BAGHDAD, Iraq - For months, Baghdad residents have tried to maintain the appearance of normalcy while the threat of war grew closer. Now the city seems to have finally dropped its business-as-usual pretense, succumbing to the reality that a U.S. attack could come soon.

Embassies are closing. The United Nations is pulling out expatriate staff. Residents are hoarding food, water and fuel, buying generators, drilling neighborhood wells and cleaning out basements to use as bomb shelters.

Throughout the city, workers are building sandbagged positions and digging trenches. Members of the ruling Baath Party are organizing neighborhood resistance cells. The dinar, Iraq's currency, is slumping and food prices - especially for canned food and bottled water - are soaring.

As recently as a few weeks ago, many Baghdad residents had at least publicly adopted a fairly laid-back attitude toward the threat of war, reflecting both fabled Arab fatalism and the experience of having lived through two wars and periodic U.S. strikes over two decades.

Now, though, store owners have begun moving their merchandise to warehouses, fearing bombing or looting. Others are not replenishing their stocks. Some residents are honing their evacuation plans, making arrangements with relatives in what they see as the relatively safe countryside.

Families can be seen moving out from central Baghdad's Soviet-style apartment blocks, loading trucks with suitcases and boxes.

On Wednesday, 35 high school students filled burlap sacks with dirt and piled them into a defense position opposite the Al-Rashidiyah Bridge over the Tigris River on Wednesday.

"This is a sensitive area and it must be defended," said Ahmed Yassin, 16. "We must defend our nation because right is on our side."

Baghdadis whisper rumors that authorities are preventing people from leaving the city, but motorists reported Wednesday that traffic in and out of the city was normal, with only routine identity checks at roadblocks.

Only wealthy Baghdadis can afford to leave the country to neighboring Jordan or Syria. Most of the city's 5 million people must face the grim prospect of war.

Their fears are accentuated by nightmarish memories of a similar situation 12 years ago.

Muwafaq Fadil, a 54-year-old taxi driver, said his son Simon, then 4, was so afraid during the six-week bombing campaign in the 1991 Gulf War that he hid under the sofa every night. Daughter Mariam, 6, fell unconscious when the bombing grew intense.

"My wife Maria prayed all night and I could not sleep until daylight, when I felt safe," Fadil said Wednesday. "I wish we could go abroad this time, but I don't have money."

Fadil said that for the past few weeks, his son has been unable to concentrate and suffers from stomach aches. Fadil blames the prospect of war.

The war jitters are also being felt in Baghdad's limited nightlife. Fewer and fewer patrons show up at restaurants. Nightclubs have been closed by presidential decree since the early 1990s.

Many of Baghdad's estimated 60 embassies - including those of Portugal, Spain, Thailand and Japan - have pulled out their staff. A rapidly shrinking number of others remain, including most countries vocally opposing a war: France, Germany, Russia, Cuba, Venezuela and most Arab countries.

Grace Princesa Escalante, the Philippines' top diplomat in Iraq, remains as well.

She has enjoyed a reputation for giving the best parties in Baghdad since she arrived two years ago. They have become a symbol of normalcy in a city where such symbols are increasingly in short supply.

But she may have given her last party this week - and even that didn't prevent war talk from dominating the conversation. It wasn't until she switched on the karaoke machine that the pace picked up.

Guests sang a rendition of the Eagles' 1970s hit "Hotel California," replacing the chorus with "Hotel Al Rasheed," the name of Baghdad's most famous hotel. They sang especially loudly when they came to the line: "You can check out any time you like, but you can never leave."

The evening's finale was another apropos 1970's classic: Gloria Gaynor's "I Will Survive."

www.galvnews.com By Scott E. Williams The Daily News Published March 13, 2003

GALVESTON — Every year, the Beach Patrol welcomes a new class of lifeguard hopefuls with differing degrees of swimming experience. This year, one of the rookie class members has a little more than the typical first-year lifesaver. “We met one morning when I was teaching a course in Venezuela,” said Peter Davis, Beach Patrol assistant director. “I had been swimming, and he was willing to swim with me, so I thought, ‘Great, I finally have someone to work out with who can keep up with me.’ About a third of the way through, I realized what I was up against. He really put me through some pain.” Gerardo Vera started swimming when he was 4 years old in his native Venezuela in the 1950s. At six, he went to his first swim meet, and about a decade after that first meet, he was training to represent his country in the 1972 Olympics. “My coach, Gregorio Tavio, asked me if I wanted to try for the Olympics, and I said, ‘Sure,’” said Vera, 48. “He told me, ‘When I say eat, you eat. When I say sleep, you sleep. When I say run, you run.’” Vera said he was used to training hard, year round. “Swimming has no season,” he said. “You have championships in March, so you have to keep in competitive shape through the December break.” Vera said he changed everything about his life to revolve around his training. “I changed schools to be two blocks from the pool. I moved in with my sister because it was closer,” he said. He swam against U.S. champion Mark Spitz, who ended up winning five gold medals to go with the two he had won in 1968. Vera finished 11th in the 200-meter race, 13th in the 400 meters and 17th in the 1,500 meters. His finishes in the shortest two races made him the highest-finishing swimmer from any Latin country, including Italy and Spain. A bout with hepatitis B kept Vera from competing in the 1976 Olympics, and by the end of the year, he had decided to attend the Universidad Central de Venezuela to study veterinarian medicine. He put swimming aside and pursued that field while working as a teacher and technical service director throughout the Western Hemisphere until he was sent to perform technical support in his homeland. There, political unrest caused his office to close, and he decided to make a change. A few weeks ago, he ran into Davis, who was teaching a course in CPR and water rescue to lifeguards in the area. Vera asked about becoming a lifeguard. “We’re lucky because, in Venezuela right now, it’s tough to get work, so it worked out for us to get someone of his caliber,” Davis said. Vera said he felt like the lucky one, and hoped to catch on as a full-time lifeguard. “I feel great,” he said. “The rest of the kids here, they’re really educated swimmers. I’m really impressed with the high level of recognition and responsibility here. When I’m out with the other starting lifeguards, they’re all so much younger, it feels like I’m swimming with Luis. He’s my oldest son. “I’m really happy to be here. It makes me feel younger.”

www.timesdispatch.com THE ASSOCIATED PRESS Mar 13, 2003

VIENNA, Austria - A surge in world oil output last month has left producer countries with too little spare capacity to fully offset a wartime halt in supplies from Iraq.

The International Energy Agency said yesterday that output increased 2.5 percent worldwide in February and that oil inventories tightened in major importing nations. Fears of a U.S.-led attack on Iraq propelled prices to their highest levels since the 1991 Persian Gulf War.

International oil markets are "running on empty" as war clouds gather again in the gulf, the agency said in its monthly oil market report.

"A further supply disruption would tax a system operating at close to capacity," the report said.

The only reliable cushion for consumers may be the 4 billion barrels in strategic stocks of crude that IEA members have amassed for use in an emergency, it added.

The agency issued its grim assessment a day after the Organization of Petroleum Exporting Countries decided to leave its oil production quotas unchanged at 24.5 million barrels a day. OPEC, which pumps about a third of the world's crude, made clear that it would boost its output to try to cover any shortfall arising from a war.

The IEA is the energy watchdog of the Organization for Economic Cooperation and Development, a group of the world's wealthiest oil-importing countries.

While highlighting many causes for concern in oil markets, the IEA expects that the end of winter - the peak season for heating oil sales - will reduce demand for crude by about 1.6 million barrels a day. Such a decrease would offset a loss of Iraq's exports under the U.N. oil-for-food program, the report said.

World production rose in February by 1.96 million barrels a day to 79.41 million barrels, and OPEC contributed more than three-fourths of the increase, the agency said.

OPEC claims to have 2 million to 4 million barrels in additional production capacity. The IEA argued that OPEC's "effective spare capacity" - the additional crude it could produce on short notice - was much smaller.

The agency said OPEC's effective spare capacity fell last month to 1.72 million barrels a day from 2.37 million barrels in January, as the cartel produced more oil to make up for deliveries during Venezuela's strike. With OPEC increasing production to cash in on high prices, this extra capacity has probably diminished in March to fewer than 1 million barrels a day, the report said.

Iraq produced 2.49 million barrels a day in February. If U.S.-led forces attacked Iraq during the second half of March, the IEA suggested that it would be May before OPEC could offset the shortfall.

On the New York Mercantile Exchange yesterday, April contracts of U.S. light, sweet crude rose $1.11 to $37.83 a barrel . On the International Petroleum Exchange in London, April Brent rose 62 cents to $33.91 a barrel