biz.thestar.com.my BY KATHY FONG

GOLD and crude oil prices spiked up again but the US dollar lost strength in Asia yesterday as fears of an impending war loomed after the United States hardened its resolve to launch a military attack against Iraq.

The spot gold price was up US$5.60 at US$339.80 per ounce in late Asian trading after hitting a high of US$345.

The precious metal had fallen back to US$334.20 last Thursday on expectations of a delay in military action against Iraq, after peaking at a 6½ year high of US$388.50 on Feb 4 when investors flocked to the traditional safe haven.

Tokyo gold futures went limit-up yesterday morning after Wa- shington gave only 24 hours for the United Nations to find a diplomatic end to the Iraq crisis.

Crude oil prices also rose sharply on the threat of imminent war. The strong buying interest was fuelled by worries that military action in the Gulf would disrupt supplies from other oil producers in the Middle East, which account for about 40% of global crude exports.

In Asia trading, Brent crude was up US$1.25 to US$31.42 per barrel yesterday, while US light crude leapt US$1.26 to US$36.64.

US light crude had jumped to a 12-year peak of US$39.99 a barrel in February, only US$1.16 shy of the record high struck in October 1990 in the build-up to the first Gulf war.

However, Kuwait's acting oil minister Sheikh Ahmad al-Fahad al-Sabah said on Sunday that the country would try to keep its main northern oilfields, which produced about 400,000 barrels per day (bpd), running in the event of war.

Kuwait has already closed two small fields on the Iraqi border, Abdali and Ratqa, which have a combined production of 35,000 bpd. The country currently produces nearly 2.4 million bpd.

Venezuela, the world's fifth largest oil exporting country, has also assured that it could raise production should the Or- ganisation of Petroleum Exporting Countries (Opec) decide to pump more oil into the market in the event of war.

Opec, which controls 60% of world crude exports, pledged last week to provide adequate supplies if a war against Iraq makes the move necessary.

However, the expectation of an imminent war applied downward pressures on the US dollar as investors' reluctance to hold US assets resurfaced.

The yen was quoted at 117.79 to the US dollar yesterday compared with 118.23 last Friday in New York.

The euro rose to US$1.0791 from US$1.0739, while the Ausralian dollar strengthened to 60 US cent from 0.5947 US cent.

But the British pound continued to soften against the US dollar. The currency was quoted at US$1.5814 yesterday compared with US$1.5832 last Friday.

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www.heraldtribune.com By The Associated Press

Rep. Billy Tauzin, R-Chackbay, urged Congress to increase the capacity of the Strategic Petroleum Reserve to one billion barrels, and to fill the reserve to that capacity when cheaper oil is available.

He made the recommendation in a letter to his colleagues, a copy of which was released Monday.

Current capacity is about 600 million barrels in the reserve facilities on the Louisiana and Texas coasts. A larger reserve will make the country better able to deal with any interruptions in supply that might be caused by such occurrences as the looming war with Iraq, recent supply disruptions in Venezuela and skyrocketing oil prices, said Tauzin, chairman of the House Energy and Commerce Committee.

Law already authorizes and SPR capacity of a billion barrels. Tauzin said Congress should approve legislation allowing the Department of Energy to go ahead with steps to expand capacity, and to fill the reserve to capacity when oil prices are down.

Last modified: March 17. 2003 6:15PM

www.vheadline.com Posted: Monday, March 17, 2003 By: Patrick J. O'Donoghue

As usual, the United States has been sending mixed signals on the Venezuelan crisis ... the US Embassy in Caracas has congratulated Banking Superintendent (Sudeban) Irwin Ochoa for the Venezuelan government’s support of the international effort against the funding of terrorists … “with its help we have been able to make positive advances towards our objectives.”

On the other hand, US military commanders have been attacking the Chavez Frias administration for its alleged scaling down of borderland sorties against Colombian guerrilla movements. US State Department spokesman Richard Boucher has dismissed charges from Venezuelan Foreign Minister (MRE) Roy Chaderton Matos that Bush administration's special envoy to Latin America, Otto Reich is promoting a “silver bullet solution" to the Venezuelan political crisis on … “it’s a ridiculous lie.”

Wall Street Journal analyst Mary Anastasia O’Grady has published what she says are details of the Venezuelan government’s alleged links with terrorist States such as Iraq and Libya, as well as contacts with Colombian guerrilla, Castro and rogue state security agents. O’Grady also suggests that, apart from placing Cuban security agents inside Venezuelan security forces, Chavez Frias has allowed agents from Middle East rogue states to join up.

www.srimedia.com Posted by on Mar 18, 2003, 10:39pm

A Shell platform in the Niger Delta The clashes between navy troops and ethnic Ijaw militants near Nigeria's southern oil town of Warri in the Niger Delta resulted in the death of five civilians on Sunday.

Activists of the Federated Niger Delta Ijaw Communities (FNDIC) group said that the civilians died when troops raided an Ijaw town called Okerenkoko, on Thursday. The soldiers had accused community members of planning to disrupt the operations of Royal Dutch Shell. The Ijaw claim their fishing communities have been polluted by the oil industry. They also have a long-standing grievance over lack of compensation from Shell and the US oil company Chevron Texaco.

Nigerian navy spokesman, Shinebi Hungiapuko, confirmed there had been clashes between troops and armed militants. He said the situation was still under control but did not give further details.

Royal Dutch Shell has has an enormous amount of criticism for its operations in the Niger Delta
Africa's largest oil producer Shell, which produces about half of Nigeria's output of two million barrels a day, has key facilities in the area.

On Sunday the oil company said that it had begun evacuating "non-essential" staff from the affected areas in compliance with its safety regulations. According to local officials, the company has also shut down two oil facilities with a combined output of 55,000 barrels per day as a precautionary measure. On aggregate, total output form the country has fallen by 30,000 barrels a day.

Shell also said three policemen escorting a company barge on the Esravos River were taken hostage on Friday and were yet to be freed.

The latest unrest has its roots in a violent dispute which broke out in Warri in February between the Urhobo and Itshekiri communities over the delineation of electoral wards ahead of April-May general elections. The Ijaw community later sided with the Urhobo, alleging that the way the boundaries of the wards were drawn up favoured the Itshekiri.

A Shell platform and refinery in the Niger Delta In a petition to President Olusegun, Obasanjo Bello Oboko, president of FNDIC said "Our fear is that the whole political processes in Warri is being militarised. Security operatives have been secured to perpetuate unlawfully delineated electoral wards."

Tension in the Warri area has added to apprehension that the coming elections, the first since the 1999 vote that ended more than 15 years of military rule, may be marred by violence. Rival supporters of different political parties have clashed in various parts of the country, while several cases of political assassinations have been recorded nationwide.

The threat of war between the United States and Iraq and the ongoing political crisis in Venezuela has already sent world oil prices spiralling, and traders are nervously eyeing the unstable situation in Nigeria, Africa's largest oil producer.

A judicial committee set up by Nigeria's parliament last month called on Shell to pay $1.5 billion in compensation to the Ijaw.

www.smartmoney.com By Stephanie AuWerter March 17, 2003

ACROSS THE COUNTRY, Americans are suffering from gasoline sticker shock. Just one year ago, the average price for a gallon of regular unleaded gas was $1.25, according to the American Automobile Association (AAA). These days it's $1.72 (as of March 17, 2003; click here for the latest prices) — a whopping 37% increase. In the past month alone, the average price per gallon has jumped eight cents. That's pretty dramatic when you consider that last year prices hovered consistently within a four-cent range, says AAA spokesman Mantill Williams.

The culprit: a perfect storm of factors affecting the price of crude oil, which is refined to create gasoline. Inventories are low thanks in part to the cold winter temperatures in much of the country, most notably the Northeast. (Freezing temperatures led to a higher demand for heating oil, which also comes from crude oil.) On top of that, a major strike in Venezuela has crippled that country's exports.

Exacerbating all of this, of course, is fear over war with Iraq — a scenario that appears more likely with each passing day. Whether prices will continue to climb depends on what sort of war it turns out to be. A short, successful war should cause prices to fall. But if it's a prolonged campaign — or if Saddam Hussein ignites his oil fields — you can expect prices to go even higher.

Higher gas prices mean tighter budgets for many drivers. Fortunately, there are lots of ways to save.

Shop Smart It pretty much goes without saying that you need to be a savvy consumer these days. Prices can vary — sometimes significantly — from station to station, so pay attention to which one offers the best prices, says Bill Bush, spokesman for the American Petroleum Institute.

Some Web sites can help you follow prices at local stations. At GasPriceWatch.com, more than 76,000 gas-price "spotters" track local prices and regularly update the site's data. Another site worth checking out is GasBuddy.com, a portal site that connects approximately 170 regional gas-tracking Web sites. AAA's Web site also provides regional gas prices.

And keep your eyes peeled. While rumors of price gouging are typically inaccurate, if you notice that a gas station has rapidly and dramatically raised its prices to a suspiciously high price (say by more than 50 cents overnight), report it to AAA or the Better Business Bureau, says AAA's Williams.

Feed Your Car Right Now's a good time to dig out your owner's manual to double check which type of gas your car really needs. Unless you have a luxury car or sports car, it's likely that your automobile requires plain ol' regular unleaded. So don't pay extra for a gas with a higher octane level, says Williams. Many ordinary drivers believe that a higher octane gas will make their engines perform better — but it almost never does. Higher octane levels merely prevent what's known as "engine knock," a condition that typically affects only high-performance cars.

Time for a Tune Up Regular tune-ups can make for greater fuel efficiency. Be sure to check the air filter, transmission fluid, spark plugs and oxygen sensor — all of which can have an effect on fuel efficiency, says Jim Kliesch, research assistant at the American Council for an Energy-Efficient Economy (ACEEE) . A faulty oxygen sensor (which is part of the car's emission system), for example, can cut fuel economy by as much as 40%.

Also, make sure the tires are inflated properly. Underinflated tires can reduce fuel economy by 2% per pound per square inch below the recommended level, according to AAA. (They're also dangerous for driving.)

Lighten the Load If you have a lot of junk sitting in your truck, dump it. The more your car is weighed down, the less fuel efficient it will be, says Kliesch. Granted, you'd need to haul around a payload full of anvils for this to make a huge difference in your fuel efficiency, since every 100 pounds reduces your fuel efficiency by just 1% to 2%. But these days every little bit counts.

Also, when transporting something, keep in mind that if you can fit the item in the car rather than tying it to the roof or putting it in a rooftop carrier, you'll be more fuel efficient.

Drive Nice Aggressive driving can be costly — even if you don't get slapped with a speeding ticket. Rapid starts and harsh braking require more fuel than does smooth driving. If possible, use cruise control on the highway, says Cathy Milbourn, spokeswoman for the Environmental Protection Agency (EPA). Maintaining a constant speed saves gas.

Serious speeding also reduces fuel economy. Traveling at 75 miles per hour compared with 55 miles per hour can reduce fuel economy by as much as 26%, says ACEEE's Kliesch.

Consolidate Trips Running several errands during one outing can save gas. "Several short trips taken from a cold start use twice as much fuel as a multipurpose trip covering the same distance when the engine is warm and more efficient," says Milbourn.

Buy a Fuel-Efficient Car If you're in the market for a new car, pay close attention to its fuel efficiency. This can save you hundreds or even thousands of dollars over several years. Vehicle selection "is the most important fuel-economy decision you'll make," says Milbourn.

For a list of the most fuel-efficient cars, visit Fueleconomy.gov, a Web site created by the EPA and the Department of Energy. Another site worth visiting is Greenercars.com, which measures cars based a "green score" that factors in fuel consumption and air pollution, including unhealthy tailpipe emissions (which contribute to global warming).

Finally, if you're truly willing to go green, consider purchasing a "hybrid" car (one that combines an electric motor and a gasoline-powered engine). Doing so can be good for the environment as well as your wallet. Not only do these cars get excellent mileage, but you could also be eligible for a $2,000 federal-tax deduction. For more, click here.