www.sfgate.com FABIOLA SANCHEZ, Associated Press Writer Wednesday, March 19, 2003
(03-19) 13:17 PST CARACAS, Venezuela (AP) --

Hundreds of opponents of President Hugo Chavez rallied Wednesday to show support for a strike leader who dodged charges of treason and rebellion by winning asylum in Costa Rica.

Supporters of Carlos Ortega cheered and waved Venezuelan and Costa Rican flags in front of the Costa Rican embassy in Caracas.

The labor leader slipped into the embassy Friday after hiding from authorities for two weeks. He is waiting for the government to give him safe conduct to Costa Rica, which granted him asylum for "humanitarian reasons."

"I'm here to show him my solidarity," 78-year-old Maria Diaz said at the rally. "He fought against a dictatorship, and I am thanking him for that."

Ortega led a two-month strike designed to force Chavez's resignation or early elections. The strike fizzled last month without achieving its goal but crippled the world's No. 5 oil exporter and cost Venezuela $6 billion. Venezuela was one of the largest U.S. suppliers before the strike.

Opponents accuse Chavez of trampling on democratic institutions and alienating investment with leftist policies. The president says his foes want to oust a democratically elected leader and restore power to two corrupt political parties that ruled Venezuela for four decades.

Foes are pushing to hold a referendum that would end Chavez's rule next year. But the fractious opposition is struggling to recover from the failure of the strike.

The showing of hundreds of people at Wednesday's protest was disappointing for a movement that drew up to 1 million people to marches last year.

Strike leaders urged Chavez's opponents not to give up, saying the president was moving to crack down on adversaries.

"The word is street, street, street and more street. Not one step back!" said Horacio Medina, an executive fired from the state oil monopoly, Petroleos de Venezuela S.A., for leading the walkout.

Medina and six other former executives emerged from hiding Tuesday after a judge threw out warrants for their arrest on charges of interrupting and damaging the country's fuel supply. Prosecutors have said they will appeal that ruling.

Co-strike leader Carlos Fernandez, president of Venezuela's largest business association, is under house arrest pending trial for rebellion and instigation.

With Ortega gone, the opposition would lose one of Chavez's boldest foes and one of the few survivors of the political order the president has striven to dismantle.

Ortega, 56, dealt one of the first blows to Chavez by winning the presidency of Venezuela's largest labor union two years ago, frustrating Chavez's attempt to seize control of one of the opposition's only strongholds.

Oil production is recovering. The government says output is 3 million barrels a day -- almost what it was before the strike -- while fired executives put the figure at 2.4 million barrels.

But problems persist. The government said it would try Thursday to restart the main gasoline producing unit at the El Palito refinery, which has been down for a week because of a mechanical failure. Delays in restarting it could force Venezuela to continue importing gasoline to prevent shortages.

www.nola.com By H. JOSEF HEBERT The Associated Press 3/19/03 6:21 PM

WASHINGTON (AP) -- Global oil production has been on a rebound for weeks, but so far little of it has reached U.S. shores, according to the Energy Department.

The department's statistical agency said Wednesday that U.S. crude oil stocks remain at an uncomfortable 270 million barrels, a level the industry considers a minimum for smooth refinery operation. That's about the same as stocks have been since early January.

At the same time, oil producers, led by Saudi Arabia, have been ramping up the amount of oil they're taking from the ground. Analysts said the oil is either in storage or on tankers already on the high seas.

That, together with an expectation that war with Iraq might be brief and avoid major damage to oil fields, has caused oil prices to tumble this week. The price of crude dropped again Wednesday to $31.05 a barrel on the New York Mercantile Exchange, a decline of nearly $7 from a week ago when it reached a 12-year high of $37.83 a barrel.

Oil traders "are beginning ... to realize there's a bit of a glut of oil around," said Leo Drollas, chief economist of the London-based Center for Global Energy Studies.

Much of that oil is now in storage in the Persian Gulf or in tankers on the high seas, said oil analysts. Saudi Arabia is believed to have as much as 50 million barrels in storage in the country and more en route to other storage facilities. That's enough to replace Iraq's 1.5 million to 2 million barrels a day for about a month.

But that oil has yet to reach the U.S. markets.

Crude inventories have consistently been 300,000 to 400,000 barrels below a year ago, said Doug MacIntyre, an oil analyst for the Energy Information Administration, the DOE's statistical arm. Imports also have been down from previous levels, although OPEC producers other than Iraq and strife-torn Venezuela have been pumping more oil for weeks.

The low U.S. inventories reflect transportation delays, but also reluctance by refiners to buy oil when the price has been $35 to $37 a barrel, analysts said.

Larry Goldstein, president of the private Petroleum Industry Research Foundation, said he anticipates that U.S. oil stocks will begin to grow in the coming weeks, adding to a calming of the markets -- as long as a war in Iraq does not become messy and threaten Persian Gulf supplies.

"If we can contain whatever negative consequences (from a war) to Iraq, then the Saudis ... have enough flexibility to take care of the loss of Iraqi oil," said Goldstein.

He said the markets also have been calmed by "a more visible policy" from the Bush administration in recent days on use of the government's Strategic Petroleum Reserve. They have made clear they're ready to use some of the 600 million barrels in the government reserve independent of action by other major oil consuming nations, he said.

Still, there remains some trepidation among oil traders and analysts should war in Iraq last a while. Crude oil prices are likely to remain volatile in the months to come, they cautioned.

"This thing could go right back up," said Tom Bentz, an analyst at BNP Paribas in New York, suggesting prices could rebound once fighting erupts. "We're still vulnerable because inventories are tight."

The biggest fear in the market is that oil facilities in other Middle Eastern countries, such as Kuwait or Saudi Arabia, could be attacked -- a scenario that would cause oil prices to shoot higher very quickly, said Fadel Gheit, senior oil analyst at Fahnestock & Co. in New York.

www.accessatlanta.com By MICHAEL E. KANELL The Atlanta Journal-Constitution

With war looming, oil prices have dropped but supplies are perilously tight -- raising chances of a shortage just as American drivers rev up for spring and summer.

Despite a slight increase last week, crude oil inventories are 18 percent below their levels of a year ago -- just barely above the amount needed for daily use, the Energy Information Administration said Wednesday.

Yet after President Bush on Monday announced plans to attack Iraq, oil prices fell -- a clear sign that traders expect no disruption in supplies, no spread of war to surrounding countries. Moreover, nearby Saudi Arabia has pledged to make up for any shortfalls.

But measly oil stocks in reserve mean that America is skirting close to a shortage, according to energy experts.

"These are the lowest stocks I've seen since 1993," said Jay Hakes, former Energy Information Administration chief. "I think there's more risk at this point that prices go back up. Besides, prices are still very high. The data suggests that we are not out of the woods yet."

The United States has been depleting its reserves by consuming 1 million barrels per day more than it produces and imports, said James Williams, president of WTRG Economics.

"We continue to run on empty," Williams said.

The Bush administration has promised to tap some of the Strategic Petroleum Reserve if there is a shortage, a move that can add several million barrels a day.

There is something of an energy window, since the winter need for heating oil has softened and the vacation season is still some time off. Energy prices have been adding a roughly $60 billion-a-year tax on consumers and companies. That load grew heavier in recent weeks as oil burgeoned to nearly $40 a barrel -- almost twice the price of a year ago.

The higher the price of oil, the greater the danger to the economy. Much of America's driving -- work, school, shopping -- will be done regardless of price, and money for gas is siphoned from other things.

In 1991, the start of the Gulf War took the air out of oil prices, proving the doomsayers wrong. But this time, more supplies are threatened -- not just in Iraq. Political turmoil has kept both Venezuela and Nigeria from full production.

"That would be a lot for the Saudis and the SPR to handle," said Hakes, now director of the Carter Presidential Library in Atlanta. "But it's doable."

The economy started a slide in 2000 that became a recession early in 2001. While growth began later that year, recovery has been sluggish at best. More than 300,000 jobs were shed last month, yet the economy still has pockets of strength.

Housing has provided unprecedented power to the limping economy for two years. And refinancing -- fueled by 40-year lows in interest rates -- again hit record highs last month, the Mortgage Bankers Association said Wednesday. But purchases have leveled off.

"Despite the heated pace of refinancing, housing's positive impact on the broader economy is waning," said economist Celia Chen of Economy.com

Construction of new homes last month took its sharpest tumble in almost a decade. After a buying binge for much of 2002, supplies of unsold homes have climbed back to year-ago levels.

"A year ago, it looked like every place was doing fine, but we are starting to see some soft spots," said economist Michael Carliner of the National Association of Homebuilders. "Atlanta is one of the markets where people have to be more cautious about speculative building."

With business investment still anemic, consumers have carried the economy, but they have become increasingly fretful. Last month consumer spending faltered also, and consumer comfort last week took yet another dip, to again reach a nine-year low, according to the ABC/Money Market survey.

About 52 percent of Americans say the economy is deteriorating -- 64 percent of women, but 39 percent of men.

Yet that cocktail of indicators is an undependable guide, said Rajeev Dhawan, director of the forecasting Center at Georgia State.

"Those trends cannot be projected until the future until we know how the war turns out," said Rajeev Dhawan, director of the Forecasting Center at Georgia State. "Everything depends on how the war turns out."

The stock market, considered a leading indicator, has embraced the arrival of war as the end to uncertainty.

But Wall Street in 1991 also boomed when the bombing started -- but the economic bounce was brief. For more than a year, economic growth was shaky and unemployment kept rising.

Now, the economy will come out of the war already damaged by months of high oil prices and unexpectedly cold weather, said John Silvia, chief U.S. economist for Wachovia Securities. Pessimists have said the war will send the economy dipping back into recession. Silvia is only a bit more hopeful.

"The economy still avoids a double dip but just barely," he said.

And that is assuming the battle goes according to administration plans.

www.vheadline.com Posted: Wednesday, March 19, 2003 By: Patrick J. O'Donoghue

The Venezuelan Economic Coordination & Planning (Cordiplan) Ministry has announced that it will present the Inter American Development Bank (IADB) with its new social security design, for which it will request funding.

The report called the “design for the new social security institutionality” is currently in the finishing stages at the Finance, Labor, Health and Planning ministries. Each sector will present its findings at the next inter-ministerial meeting convened to edit a final report and come up with cost estimates for funding purposes.

A provisional reform of the service in December brought into being a Social Security Superintendency and Social Security Treasury in charge of undertaking affiliations. IADB director for Venezuela and former Venezuelan Finance Minister Jose Alejandro Rojas says the credit portfolio is up for review in April and some loans could either be increased or cut.

www.vheadline.com Posted: Wednesday, March 19, 2003 By: Patrick J. O'Donoghue

National Assembly (AN) president Francisco Ameliach admits that the government’s social programs have not been up to scratch and says funds will start rolling in once the effects of improved administration at Petroleos de Venezuela (PDVSA) pay dividends in Q2.

Ameliach also forecasts a reactivation of the economy despite what he dismisses as “bad news mongering of so-called economic experts.” Attacking print & broadcast media, Ameliach criticizes lack of media coverage of AN events. “When I became AN president, I met the heads of the different parliamentary groups and agreed to turn the Assembly in Venezuela’s main forum for political debate … the opposition has returned to the AN after the stoppage and we have set up an appointments committee for the new National Electoral College (CNE). We've reached a House agreement condemning terrorism … the Energy & Mines (MEM) Minister has been invited to address the House on the Delta Platform natural gas program … that wouldn’t have happened last year.”

Primero Justicia (PJ) deputy, Liliana Hernandez receives praise for her well-thought out contribution to the foreign exchange rate debate but Ameliach has slammed critics of the Armed Force (FAN) for harping on its incapacity to keep tabs on Colombian guerrilla incursions. “A time will come when the FAN will dub those politicians as enemies, just as they did with Gente del Petroleo activists for sabotaging PDVSA.”

Ameliach says he spend 15 years as an officer in the FAN, 9 of which were spent in border areas.