sg.biz.yahoo.com Friday March 21, 3:49 AM (This updates a story that ran at 1712 GMT with DAX closing price) By Maria Daly Of DOW JONES NEWSWIRES

LONDON (Dow Jones)--European stocks ended mostly lower in thin volume Thursday as investors reacted with caution to news that the war in Iraq had begun.

At the close, London's FTSE-100 Share Index was up 0.01% at 3765.7, while Paris's CAC-40 Index fell 1.5% to 2794.83. At 1657 GMT Frankfurt's Xetra Dax Index closed 0.4% lower at 2604.85.

David Buik at Cantor Index said market volume was negligible on the first day of war in comparison with previous sessions, as the market remained preoccupied with watching battle progress in the Gulf.

U.S. President George Bush's statement Wednesday evening that war may be drawn out also caused investors to be sidelined. Traders commented that hopes for short conflict gave way to fears of a protracted campaign.

Economist Neil Parker at Royal Bank of Scotland said market sentiment is likely to continue being fueled by the drip-feed of news on Iraq as traders look for evidence of a quick U.S. victory.

He added that concern over use of chemical weapons is likely to unsettle sentiment and as troops move closer to Basra and Baghdad there is likely to be a heightened sense of unease. "In the current environment, investors are loathe to increase their exposure to risk," he said.

The assumption of a short successful war with Iraq is now being tested, said strategists at ABN Amro.

Morgan Stanley Chief Global Economist Stephen Roach warned that investors shouldn't conclude that U.S. military supremacy will lead to the perfect victory in Iraq.

"Courtesy of global terrorism, the proliferation of weapons of mass destruction, and the breakdown of once steadfast alliances, today's world is a far more unstable and much scarier place than it was in the aftermath of the Gulf War of 1991," he said in a note published Thursday.

Russian President Vladimir Putin Thursday demanded a quick end to the U.S.-led attack on Iraq, saying it was in no way justified and calling it a "big political mistake."

Analysts also warned that even if it is a short sharp war, any resultant "victory rally" may stall on the less- than-sparkling prospects for global economic recovery.

Friday's session is likely to remain closely tied to reports of military progress from the war zone, but markets may also experience volatility due to the expiration of derivative contracts across the region.

Most European markets will experience "double witching," which occurs when the contracts for stocks index futures and stock index options expire on the same day. Traders expect Friday's expiration of derivatives contracts to be extremely volatile.

"Tomorrow's trade could be dramatic to say the least, but in the meantime sentiment remains undecided," commented one London trader.

Oil stocks were higher in late trade after unconfirmed reports that two Iraq oil fields were on fire. However, gains were tempered as both Saudi Arabia and Venezuela have pledged to keep the oil flowing during wartime. BP ended up 0.7% at 417.25 pence in London.

Insurance stocks - one of the strongest performing sectors in recent sessions - reversed course Thursday.

Europe's largest insurer, Allianz, said it would raise at least EUR5 billion in a bumper rights issue and bond sale. Shares fell 8.9% to EUR59 in late trade, leading decliners in Frankfurt.

The rights issue, the biggest ever in Germany and the largest one to be underwritten, will boost the number of outstanding Allianz shares by as much as 50% from the current 243 million.

Separately, Munich Re, the world's largest reinsurer, said it and Allianz will reduce their reciprocal shareholdings to around 15%. Munich Re also said it intends shortly to strengthen its capital base through the issue of subordinated bonds. Shares fell 6.7% to EUR76.59.

French insurer Axa came under pressure after credit ratings agency Moody's downgraded the company's senior debt rating, warning that volatile stock markets could continue to affect profitability. Shares fell 4.8% to EUR11.7, leading decliners in Paris.

Other notable decliners included Sage Group, the U.K.'s largest maker of accounting software. Shares fell 12.1%, to 123 pence after UBS Warburg cut its rating on the company to reduce from neutral.

At 1657 GMT, the Dow Jones Stoxx Index of shares in European companies was trading down 0.6% at 178.22, while the Dow Jones Euro Stoxx Index, which tracks companies in countries that joined the single currency, fell 1.3% to 170.20.

The Dow Jones Euro Stoxx 50 Index was down 1.6% at 2152.7 and the Dow Jones Stoxx 50 Index was down 0.6% at 2223.9.

-By Maria Daly, Dow Jones Newswires; +44-20-7842-9308; maria.daly@dowjones.com

sg.biz.yahoo.com Friday March 21, 3:47 AM By Masood Farivar OF DOW JONES NEWSWIRES

NEW YORK (Dow Jones)--U.S. crude oil prices tumbled again Thursday afternoon, as Baghdad came under new bombardment and U.S. Marines crossed into Iraq.

The developments rekindled speculation the conflict will be short lived, leaving the world flooded in oil pumped to head off a supply disruption that many traders now think won't be very significant.

Oil prices had rallied earlier in New York and London on reports that some oil wells in southern Iraq were on fire, raising concerns about long-term damage to Iraq's production capabilities. But the scale of the bombardment that followed reinforced a persistent belief that the war will be a quick one and "usher in an era of new low oil prices," said Phil Flynn, an analyst at Alaron Trading Corp.

May light, sweet crude futures at the New York Mercantile Exchange fell as much as $1.61 to a low of $27.75 a barrel. Less-active April futures, which expire Thursday, were down as much as $1.88 at $28.00 a barrel, a three-month low for a contract closest to expiration.

"The harder we bomb, the more we come off," a floor trader said of the selloff.

Nymex crude oil futures, after soaring to nearly $40.00 a barrel ahead of the war, have fallen 26% in the past six trading days as a U.S. attack began to appear inevitable.

OIL UPDATE -2: Supply Disruptions Minimal, Glut Feared

The price decline has come as officials in both producing and consuming countries reassured the market that they won't allow supply shortages to develop. The Organization of Petroleum Exporting Countries said it would make up for any shortfall resulting from the war.

In a statement issued shortly after news of the military strikes Wednesday night, OPEC President Abdullah Bin Hamad Al-Attiyah said he had consulted with OPEC members who have "pledged to use, in the interim, their available excess capacities to ensure continued supply."

In a departure from the events of the Persian Gulf War in 1991, neither the International Energy Agency, the Paris-based energy watchdog for the West, nor the U.S. has ordered the release of crude oil from their strategic reserves, saying supply disruptions haven't been sufficient to warrant the step.

U.S. Energy Secretary Spencer Abraham said Thursday that the U.S. and others in the IEA will release some of their 1.2 billion barrels of crude oil reserves "if needed" during the Iraq war.

But he also pointed to recent efforts by oil-producing countries to increase supply, in particular a sharp increase in Saudi oil output in recent weeks.

Analysts said those comments helped assuage fears that a war in Iraq - which produces 3% of the world's oil - could create severe supply shortages.

Iraq's 1.7 million barrels a day of oil exports have essentially come to a halt. But initial reports from the U.S. Navy have indicated no signs of disruption to shipping lanes in the Persian Gulf, including the crucial Strait of Hormuz. Tankers continued loading crude Wednesday at Kuwait ports, just a few dozen miles south of Iraq.

Global supplies are such that the White House dismissed concerns about reports that a handful of oil wells in southern Iraq were on fire.

"World energy supplies are more than adequate to compensate for any disruption these acts may cause," White House spokesman Ari Fleischer said, reiterating that the U.S. saw no need to tap its Strategic Petroleum Reserve. "Saudi Arabia and other major energy suppliers have increased production and their exports are proceeding normally in this regard."

Glut Feared

U.S. oil inventories are near 30-year lows and producers are nearing the limits of their capacity, so there is little margin for error in the event supplies in the oil-rich Persian Gulf region are substantially disrupted.

But with OPEC pumping at unusually high levels, Venezuelan output returning to more normal levels and a colder than normal winter largely over, traders are now factoring in the prospect of a glut in the market.

"Assuming that everything goes well, the fundamentals look fairly bearish," said Aaron Brady, an analyst at Energy Security Analysis Inc. in Wakefield, Mass. "OPEC is pumping at a high rate, Venezuela is back, and even if Iraqi oil is cut off for some period of time, it is manageable."

A glut-induced drop in oil prices would be welcome news for the U.S. economy, which has been struggling to mount a recovery while burdened with high energy costs, and U.S. consumers, who are paying record prices for gasoline.

But it terrifies OPEC members, who have already begun to talk about the need to cut output to head off a plunge in prices.

"If prices go through the floor, we will decide about cutting production in the same way that we put oil in the market when prices go through the roof," OPEC Secretary-General Alvero Silva said.

Through unusually high levels of coordination, OPEC members have managed to support prices at relatively high levels for more than three years. But some traders see trouble ahead for the group's winning streak.

Iraq will badly need to boost revenues to rebuild, leading some to speculate that the country, a founding member of OPEC, may want to leave the group to escape its quota restrictions. That could weaken OPEC's resolve to tighten global supplies, analysts said.

"There is a a perception that a regime change in Iraq will dramatically change the world oil balance of power," Flynn said.

-By Masood Farivar, Dow Jones Newswires; 201-938-2094; masood.farivar@downones.com

sg.biz.yahoo.com Friday March 21, 3:11 AM By Selina Williams OF DOW JONES N EWSWIRES

LONDON (Dow Jones)--As global oil markets keep a nervous eye on possible disruptions to Persian Gulf crude shipments amid a U.S. war in Iraq, ethnic unrest in oil-rich Nigeria could become as potentially damaging to supplies as the crisis in Venezuela.

Political and civil unrest in fellow Organization of Petroleum Exporting Countries member Venezuela earlier this year cost the global oil market 125 million barrels, helped to drain U.S. commercially held petroleum stocks to critically low levels and combined with Iraq war jitters to push oil prices to well over $30 a barrel.

Although Nigerian output woes aren't critical yet, the situation could escalate and the timing of the crisis isn't great, says New York-based energy analyst Jay Saunders at Deutsche Bank.

"Nigeria won't be as bad as Venezuela, but the situation is volatile and it comes at a bad time," Saunders said.

The disruption of 156,000 b/d of Nigerian oil supplies due to clashes between rival tribes in the oil-rich Niger delta comes amid concerns that OPEC might not be able to compensate for the loss of crude oil supplies from more than one member.

As it is, OPEC has already pledged to cover a loss of some 1.7 million barrels a day of Iraqi crude exports due to the war. Thursday, legal exports of Iraqi oil through the U.N. oil-for-food program effectively halted following the departure of the last scheduled oil tanker from the Ceyhan oil terminal in Turkey.

However, OPEC Secretary General Alvaro Silva said Thursday that the group isn't currently worried about Nigeria.

"As Venezuela's production is normalizing, it wouldn't be a problem to fill in for a lack of production," he told reporters in Vienna Thursday.

But analysts say that it will be a while before Venezuelan output is back to its pre-strike level of around 3 million b/d as some of the oil fields and infrastructure were permanently damaged by the shut downs during the industrial action.

Nigeria Faces Unrest, Strikes, Elections

The clashes between rival tribes, that shut in oil produced by oil majors Royal Dutch Shell (RD) and ChevronTexaco, have left several people dead in one of the worst periods of violence in years. The skrimishes also follow in the wake of strikes over pay and conditions by the main oil workers unions in Nigeria.

And to top that all off, Nigeria's shaky democratic process will be tested by a round of presidential and parliamentary elections in April - the second since independence in 1960. Revenues from oil exports are one of the major issues in election campaigns.

It's not unusual for political upheavals in Nigeria to significantly impact output. A military coup in 1985 reduced the West African country's production by 10% and labor union strikes in 1994 cut output by 20%, a recent Deutsche Bank report said.

Oil traders on London's International Petroleum Exchange said the problems in Nigeria were "supportive" for the oil price Thursday and they were monitoring developments there.

But for the moment, traders were more focused on the escalation of U.S. airstrikes on Iraq, reports of fires near the southern Iraqi oil fields of Basrah and the Iraqi scud missile attacks aimed at Kuwait's northern Iraqi oil fields.

Physical crude traders said oil in storage facilities would plug the immediate shortfall of any missing Nigeria barrels and if the unrest escalates or the oil remains shut-in for a longer period, then delays to loading vessels would start to be felt.

For now the shut-in will mainly affect cargoes of oil that are scheduled to move in the next few days, the traders said.

Nigeria, which currently produces around 2 million b/d, is dependent on revenues from oil exports. It is one of the main oil exporters to the U.S.

• By Selina Williams, Dow Jones Newswires; +44 207 842 9262; selina.williams@dowjones.com

Posted: Thursday, March 20, 2003 By: Patrick J. O'Donoghue

The Pan American Health Organization and the Inter American Development Bank (IADB) place Venezuela among the top three places in its Latin America crime ratings table.

Venezuela is singled out this year not just because of the notable hike in crime rates but more so for the government’s passivity in setting up crime prevention policies. The report contrasts Venezuela with the efforts other countries have put into prevention measures aimed at lowering or controlling their crime rates.

Peru, for example has adopted a street and abandoned children policy, Colombia has its Carrot Plan cutting down on opening and closing times of nightclubs and bars. Venezuela has had 5 Interior & Justice Ministers in two years, more than 9,000 citizens were murdered last year and the authorities prefer to keep the matter of crime prevention under wraps.

www.vheadline.com Posted: Thursday, March 20, 2003 By: Patrick J. O'Donoghue

Former Petroleos de Venezuela (PDVSA) managers have held another protest outside an Embassy, this time the US Embassy where they had earlier met embassy economic adviser, Louis Anderson and handed him a document in which the group warned the USA that President Hugo Chavez Frias could not guarantee oil supplies to the USA.

Spokesman Alfredo Gomez says supplies to the USA were no problem in the past.

“The situation in PDVSA isn’t the picture the government paints … it’s not producing 3 million bpd, but more like 2.3 million and less than 100,000 bpd of gasoline … it’s not sustainable for the USA.”

The group continues to argue that inexpert workers have replaced the 16,000 dismissed employees and workers adding to the lack of guarantees of supplies.

Gomez says the group will hold similar protests outside the embassies of the Group of Friends (USA, Brazil, Chile, Mexico, Spain and Portugal).