www.thestar.com Mar. 14, 2003. 01:00 AM RICHARD VALDMANIS REUTERS NEWS AGENCY

NEW YORK—World oil prices plunged yesterday as wrangling at the United Nations further delayed a vote on a new resolution that could pave the way to war with Iraq.

U.S. light, sweet crude dropped $1.82 (U.S.), or 4.8 per cent, to $36.01 a barrel in New York. London's benchmark Brent crude oil slid $1.44 to $32.47.

Oil prices are still up roughly 12 per cent this year, underpinned by concerns that a war in Iraq, which ships around 4 per cent of world oil exports, could upset supplies from other producers in the Middle East.

A report that Japan, Asia's largest oil consumer, may sell 300,000 barrels per day from its emergency petroleum reserves if U.S.-led forces invade Iraq added to the day's slide, oil dealers said.

Prices slumped after the White House said diplomatic efforts to secure a consensus at the United Nations on a new resolution on Iraq could spill over into next week.

U.S. Secretary of State Colin Powell told a congressional committee there may be no vote at all on the resolution, widely seen as a war trigger. Some see that as a sign Washington fears it may not get enough support at the international body to lead a war against Iraq.

A German government source said in an interview that a compromise on an Iraq proposal was unlikely, even if a vote in the U.N. security council is put off until next week. France has threatened to veto any resolution that would call for military force, and China, Russia and Germany have all expressed opposition.

Further relief from soaring oil prices came from an end to freezing U.S. temperatures that have supported heating oil prices at near-record levels in recent weeks.

Prices had jumped on Wednesday as a fall in U.S. stocks combined with worries that the Organization of Petroleum Exporting Countries would not be able to compensate for lost Iraqi exports in event of war.

The latest U.S. data showed crude inventories at a 27-year low. Sharp drops also hit gasoline inventories, which ought to be growing to accommodate the summer driving season. Analysts say core oil stocks are now 89 million barrels below normal.

"Given the reported ramping of OPEC production and the continued recovery of Venezuelan production, the shortfall is shocking," SG Securities said in a research note.

The OPEC cartel has stepped up output this year to cover the lack of crude from Venezuela, where an anti-government strike brought production to little more than a trickle in December and January.

Venezuela, normally the fifth-biggest exporter, providing about 13 per cent of U.S. oil imports, has since increased shipments of crude and oil products, although rebel oil workers say production is still less than half of normal amounts.

Analysts say timing is now key for a war in Iraq because oil demand is generally 2 million barrels a day lower in the second quarter of the year as spring advances, and the loss of Iraqi crude would not be as acutely felt.

The International Energy Agency, a Paris-based energy watchdog for industrialized countries, has said OPEC probably doesn't have enough production capacity to compensate immediately for the loss of Iraqi and Kuwaiti oil.

OPEC, however, has pledged to guarantee supplies if war breaks out.

Saudi Oil Minister Ali al-Naimi reiterated yesterday that OPEC can deliver more oil in case of war in Iraq.

The Nihon Kezai daily newspaper reported yesterday that Japan will consider releasing oil from emergency reserves with the United States.

www.business-standard.com

Even as the Bush administration masses troops in the Persian Gulf in preparation for a war to topple Saddam Hussein, US refineries are the biggest buyers of Iraqi oil, according to a report on the website of Bloomberg.

Shipments of Iraqi crude to the US more than tripled from September to January, according to data released by the Commerce Department, the report said. Iraq supplied 17.1 million barrels in January - 6.4% of total US oil imports, the report added.

The jump in imports came as an illegal surcharge that benefited the Iraqi government was dropped and refiners sought alternatives for crude from Venezuela where a strike crippled oil production, the report said.

www.delawareonline.com By EDWARD DE LA FUENTE Staff reporter 03/14/2003

Amid a swirl of controversy and an investigation by Major League Baseball, Phillies closer Jose Mesa retreated from his threats against former Cleveland Indians teammate Omar Vizquel on Thursday.

Mesa issued a statement apologizing for his remarks in a newspaper report published Tuesday in which he vowed to hit Vizquel every time he faced the All-Star shortstop and said that "if he charges me, I'll kill him."

Mesa and Vizquel, once close friends, have been feuding for several years. Mesa was most angry at Vizquel's autobiography, released last year, in which he criticizes Mesa for his blown save in Game 7 of the 1997 World Series.

"I am sorry that my comments have caused a disruption," Mesa said in the statement. "I was hurt by remarks by a former teammate. I would never injure anyone.

"My goal is to bring a championship to Philadelphia. I would hope that this would not continue to be a distraction to the Philadelphia Phillies organization, my teammates or our great fans."

The Phillies have not taken any disciplinary action against Mesa, who wasn't given the opportunity to face Vizquel when the Phillies and Indians met Tuesday at Jack Russell Stadium. However, Bob Watson, who handles disciplinary issues for Major League Baseball, has said he is looking into the issue, and Mesa could face a suspension or fine.

Vizquel, a native of Venezuela, said Tuesday he thought Mesa, a Dominican, might not have realized the severity of the word kill.

"I don't know if he knows what he means in English," Vizquel said. "In Spanish, we say it a lot in the translation."

Phillies fodder

Infielders J.P. Roberge and Buzz Hannahan were on loan from the minor-league camp and were on the travel squad Thursday. ... The Phillies host Pittsburgh at 1:05 p.m. today, with right-hander Vicente Padilla facing Pirates righty Josh Fogg.0

reuters.com Fri March 14, 2003 02:18 AM ET

SINGAPORE (Reuters) - U.S. oil prices fell to a three-week low on Friday as the United States continued to try to garner U.N. support to use force to disarm Iraq, saying it might keep trying until next week or scrap a new resolution.

U.S. light crude fell to $35.32 a barrel, the lowest level since February 21. It later recovered to $35.80, 21 cents below the New York close on Thursday.

London's Brent crude dropped 40 cents to $32.03 a barrel, an 11-day low.

"In risk terms, I see another $1 or so of weakness, while I maintain around $12 potential upside risk," said Sydney-based independent oil analyst Simon Games-Thomas.

Volatile oil markets fell $1.50 to $2.00 a barrel on Thursday after the United States said diplomatic efforts to secure a consensus at the U.N. Security Council on a new resolution authorizing military force against Iraq could go into next week.

Bullish comments from U.S. officials earlier this week pointed to Washington forcing a vote at the Council by the weekend, potentially bringing the threat of war a step closer.

Crude had climbed some 30 percent this year to almost $40 a barrel and close to a record high at $41.15 struck in October 1990 in the build-up to the 1990-1991 Gulf War.

Traders worry that an invasion of Iraq, which itself ships around four percent of world oil exports, could upset supplies from other producers in the Middle East.

Secretary of State Colin Powell told a congressional committee there might be no vote at all on the resolution, widely seen as a war trigger -- a sign that Washington fears it might not get enough support at the international body.

Washington, backed by Spain and Britain, has met strong opposition from France and Russia, which have threatened to veto any vote at the Security Council that could lead to war.

WARMER WEATHER

Further relief for soaring prices came from an end to freezing U.S. temperatures that have supported heating oil prices at near record levels in recent weeks as fuel stocks in the world's biggest consumer have fallen to 27-year lows.

The Organization of the Petroleum Exporting Countries has cranked up output this year to cover an outage of crude from Venezuela, where an anti-government strike brought production to little more than a trickle in December and January.

Venezuela, normally the fifth-biggest exporter providing about 13 percent of U.S. oil imports, has increased shipments of crude and oil products though rebel oil workers say production is still less than half of normal levels.

Analysts say timing is now key for the war because oil demand is generally two million barrels per day (bpd) lower in the second quarter of the year as spring advances and the loss of roughly two million bpd of Iraqi crude would not be as acutely felt.

Boston-based Energy Security Analysis (ESAI) said it expected to see some strong signals from supply/demand fundamentals "even through the fog of war."

"Indeed, ESAI projections are beginning to indicate a sizeable crude oil surplus even with a forecasted reduction in Iraqi output," ESAI managing director Sarah Emerson said.

"The increase in Saudi output coupled with recovering Venezuelan output has inflated OPEC output just as European refinery maintenance is getting underway and just before Asian crude oil purchasing will drop off seasonally," ESAI said.

OPEC has pledged to guarantee supplies should war break out and Saudi Oil Minister Ali al-Naimi reiterated on Thursday OPEC's ability to deliver oil in case of war in Iraq.

OPEC wants to avoid any repeat of the 1991 Gulf War when industrialized nations released emergency oil stocks timed to coincide with the start of the allied bombing campaign against Iraq, which caused crude to plunge $10 in a single day.

The International Energy Agency, the West's energy watchdog, has said that it would 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.

www.spokanejournal.com By  Addy Hatch

Inland Northwest mining companies say they’re hitting rich veins of opportunity at their Central and South American mine properties.

Hecla Mining Co., of Coeur d’Alene, estimates it could have four additional areas under production or exploration development in Venezuela and Mexico by the end of the year. Coeur d’Alene Mines Corp., also of Coeur d’Alene, credits its South American business for its improved finances. Meanwhile, Spokane-based Gold Reserve Inc., says it has received approval from the Venezuelan government to proceed with a gold and copper mine in that South American country.

Coeur d’Alene Mines says its South American mining operations are so beneficial to the company that, “We have every expectation that we will be producing high-grade silver and gold in Southern Chile and Argentina for many years.”

Low production costs

Coeur said in an announcement of its 2002 results that production last year exceeded its expectations, and its cash costs for silver production fell to a record low of $2.89 an ounce, including byproducts. The company produced about 14.8 million troy ounces of silver in 2002, up 36 percent from the previous year, and about 117,000 ounces of gold, up 22 percent.

Two South American mines—one brought on line in 2002 and the other bought by Coeur last year—were “the primary reason for the company’s considerable production growth and reduction in cash costs,” Coeur says. Together, Coeur’s Cerro Bayo mine, in Chile, and its Martha mine, in Argentina, produced 3.1 million ounces of silver and 45,200 ounces of gold. The average total cash cost for production in those mines was 38 cents per ounce of silver, a figure that includes the cost of producing both metals since Coeur’s gold production is a byproduct of its silver production, says company spokesman Mitchell Krebs.

The two U.S. mines Coeur currently operates also had improved results. Coeur’s Galena mine near Wallace, Idaho, produced a record 5.3 million ounces of silver, up 18 percent from 2001 and the company’s Rochester mine, in Nevada, produced 6.4 million ounces of silver and about 72,000 ounces of gold, both of which exceeded earlier production estimates, Coeur says.

The company says its mining success last year, combined with higher metals prices, made 2002 “a turnaround year for Coeur,” enabling the company to reduce its debt significantly.

Earlier this week, gold was trading at $354 an ounce on the spot market, up from $260 an ounce two years ago, when precious metals hit a low ebb, while silver was trading at $4.68 an ounce, up from $4.07 an ounce in late 2001.

Record Hecla production

Hecla produced 8.7 million ounces of silver last year and 240,000 ounces of gold—the largest annual production of both materials in Hecla’s 112-year history, the company says. About 167,000 ounces of that gold came from Hecla’s La Camorra mine in Venezuela. The company’s average total cash cost of gold last year was $137 per ounce.

Of Hecla’s silver production, about 3.4 million ounces came from its San Sebastian mine, in Mexico; 3.2 million ounces came from the Greens Creek mine, in Alaska, from which Hecla shares production; and about 2 million ounces came from its Lucky Friday mine, in Mullan, Idaho. Hecla enjoyed a 39 percent reduction in its average total cash cost of silver, to $2.16 per ounce.

“In addition to an outstanding year operationally, Hecla’s exploration programs continue to turn up good results,” and the company could have four more exploratory or producing operations under way by the end of 2003—three in Venezuela and one in Mexico, Hecla says in an announcement of its 2002 results.

“That’s depending on our feasibility studies, and assuming everything goes well,” says Vicki Veltkamp, vice president of investor and public relations at Hecla. While Hecla could start construction of mine ramps at those properties this year, it could take more than two years for commercial production at some of those properties to begin.

Green light for Gold Reserve

Gold Reserve Inc. says it’s getting closer to constructing its own South American operation following the Venezuelan Ministry of Energy and Mines’ approval of the Spokane company’s operating plan for its Brisas gold-and-copper property there.

“This approval is the result of considerable effort by the company and has occurred at a time period when the economics of the project have been enhanced by the recent increase in the price of gold and copper,” Gold Reserve says. Copper currently is selling for about 77 cents a pound on the COMEX spot market, compared with 74 cents a pound a year ago.

The company acquired title to different parts of its Brisas mining concession in 1992 and 1998, and has worked since then on exploring the property and conducting feasibility studies.

Gold Reserve now is working on completing a study for project financing and applying for environmental permits.