asia.reuters.com Fri March 21, 2003 08:56 AM ET By Tim Ahmann

WASHINGTON (Reuters) - U.S. consumer prices posted their biggest gain more than two years in February as energy surged on the march to war with Iraq and food costs jumped, the government said on Friday.

The Consumer Price Index, the main U.S. inflation gauge, advanced 0.6 percent last month, the Labor Department said, outstripping the 0.5 percent increase expected by Wall Street economists.

Energy prices shot up 5.9 percent, the largest increase since June 2000 while food costs staged their biggest rise since June 1996, gaining 0.7 percent.

When food and energy were stripped out, prices were mostly well-contained with the 12-month gain in so-called core costs just 1.7 percent, the smallest in nearly 37 years. On the month, the core CPI edged up just 0.1 percent, below the 0.2 percent economists had expected.

However, overall consumer prices have risen a strong 3.0 percent over the last 12 months, mostly on higher energy costs.

Bond markets showed little reaction to the data, focusing instead on the progress of the U.S. conflict with Iraq.

Oil prices rose sharply through February after a now-ended workers' strike in Venezuela cut into supplies and as the United States prepared for war with Iraq. But in recent days, as war came to appear inevitable and as bombs began to drop, prices have reversed course, shedding a quarter of their value from recent highs. Crude oil futures were near a three-month low in European trade on Friday.

The Labor Department report showed a 9.9 percent increase in the price of gasoline, the largest monthly gain since June 2000, while the cost of fuel oil spiked up 15.8 percent, the sharpest increase since February of 2000.

As for food, prices for beef and veal shot up 3.3 percent, the steepest increase since January 1984. Pork prices rose 1.1 percent, poultry gained 1.2 percent and vegetable prices rose 1.5 percent. Labor said there were no special factors to account for the jump in food costs.

Federal Reserve policymakers believe inflation may be set to drift lower this year given a high degree of slack in the economy, minutes from a January rate-setting meeting released on Thursday showed. However, officials spoke about a number of "crosscurrents" -- including high oil prices -- that made the inflation picture hard to judge.

The recent rise in oil and other commodity prices have eased fears that the United States could face deflation -- an outright drop in the general price level.

"Inflation is in existence. We are nowhere near close to a deflationary environment," said David Durrant, chief currency strategist at Bank Julius Baer in New York.

Fed officials held interest rates steady at 1961 lows this week and said they could not "usefully" characterize whether economic risks were weighted toward inflation or weakness or balanced between them given the high degree to which war clouds had shrouded the outlook.

www.pressofatlanticcity.com March 22, 2003

By ED HILT Staff Writer, (609) 272-7190, E-Mail SARASOTA, Fla. - Bobby Abreu led the National League in doubles last season with 50 while batting .308 and stealing 31 bases. He hit 31 homers the previous season while driving in 110 runs and stealing 36 bases.

In 1999, he batted .335 and tied for the league lead in triples. He has played in at least 151 games the previous five seasons. He has drawn at least 100 walks and scored at least 100 runs in each of the last four seasons.

The statistics are as versatile as they are impressive for the Philadelphia Phillies' 29-year-old right fielder.

Manager Larry Bowa doesn't see Abreu equaling those numbers in 2003. Bowa says he might surpass them.

"I think Bobby Abreu is going to have a monstrous year,'' Bowa said. "This could be one of those years where he has big numbers in all categories.''

It is not just idle talk by the manager. Bowa has his reasons.

One is tied to the civil unrest in Venezuela, Abreu's native country. Because of the troubles, there was no pro baseball in Venezuela this winter.

So Abreu, who feels an obligation to play winter ball in Venezuela, did not have to endure his usual grind. Abreu had played winter ball there every season for at least the last 10 years.

"I feel fresher,'' Abreu said. "I don't feel tired or sore. I don't think I will get tired that quickly over the season. I didn't hit at all. I just lifted weights. That's it. I lifted every day. That's why I have a little more weight.''

Abreu is noticeably bigger up top. He said he added at least eight pounds of muscle.

The new lineup figures to help Abreu, too.

Most likely, Abreu will bat third, although fifth is a possibility. Bowa has tinkered with the middle of his order most of the spring.

His lineup the last two days, including one for the rained-out game against Cincinnati on Friday at Ed Smith Stadium in Sarasota, had Abreu third and Thome fourth. Pat Burrell, after a day off, would have hit fifth against the Reds.

Bowa is considering keeping Thome and Abreu, the two left-handed hitters, together against right-handed pitchers.

No matter where Abreu hits, he knows there is greater potential to see better pitches with Thome and Burrell ahead of or behind him.

Abreu was in Venezuela last fall when the Phillies signed Thome. He already had received the news on David Bell. More good news would come on Kevin Millwood.

"Larry gave me a phone call and (general manager) Ed Wade gave me a call. I said, 'Congratulations. That's pretty nice,' " Abreu said. "We all know it's going to help the team a lot.

"They have built the team to be a contender. They are some pretty good moves. This is going to be fun.''

To e-mail Ed Hilt at The Press:

EHilt@pressofac.com

www.nydailynews.com By NANCY DILLON DAILY NEWS BUSINESS WRITER

Oil and gasoline prices took another high-octane ride yesterday, plunging and zigzagging on reports pouring out of Iraq.

After falling as much as $1.82 per barrel on rumors Saddam Hussein had been killed and U.S. forces had seized the Kirkuk oil hub in northern Iraq, crude closed down $1.21 at $26.91 per barrel.

Crude prices inched back up in afternoon trading after U.S. officials said they didn't know Hussein's whereabouts and that forces had taken control of oil fields in southern Iraq but not the north.

Crude prices have dropped sharply since reaching a 12-year peak of $39.99 three weeks ago.

Gasoline,meanwhile, plunged 6.3% to a two and a half month low. This capped the market's largest weekly decline since the last Gulf War.

"The market has almost completely lost its head. Any [news] that comes out moves prices. It's raw emotion," said Martin King, a commodities analyst with FirstEnergy Capital.

"There was a huge change from the morning to the afternoon," said Peter Zeihan, senior energy analyst at Stratfor in Austin. "The markets loved hearing that Kirkuk had been secured, but the reports were patently false."

Even so, Kirkuk is not as strategic as the Rumaila oil field in southern Iraq, he said.

Rumaila, whose fields, pipeline and loading platforms were captured by American and British forces, pumps about 1.25 million barrels of oil per day, more than half Iraq's total production. Kirkuk, by comparison, produces about 600,000 barrels a day.

Zeihan said Rumaila has stopped pumping oil for the moment since the pipeline passes through Basrah, which has not yet been secured by U.S. forces. Kirkuk is still pumping oil through Turkey.

Nauman Barakat, oil trader at Fimat International Bank, said with Rumaila now in U.S. hands, American forces "should be able to minimize the ability of the Iraqis to set more oil wells on fire. That upward pressure on prices has almost totally disappeared."

Indeed, fear that dozens of wells had been set ablaze drove crude prices higher overnight on Thursday. Later reports pegged the number of fires at fewer than a dozen.

During the Gulf War of 1991, Iraqi forces torched more than 600 wells as they withdrew from Kuwait.

Experts said oil prices are so volatile right now because worldwide supplies are extremely tight thanks to production problems in Venezuela and Nigeria and a bitter cold winter. Originally published on March 22, 2003

seattlepi.nwsource.com Saturday, March 22, 2003 By ANGELO BRUSCAS SEATTLE POST-INTELLIGENCER REPORTER

The U.S. men's national team will play Venezuela next Saturday at Seahawks Stadium in the first international soccer event at the facility, after Japan's national team pulled out yesterday because of tensions brought on by the war in Iraq.

Once the Japanese Football Association decided to cancel its two-match U.S. tour, U.S. Soccer officials scrambled to find a replacement, especially since sod already had been installed in the stadium over the synthetic FieldTurf, and tickets had been sold for the 1 p.m. match.

"We are certainly disappointed by the decision of the Japanese Football Association," said U.S. Soccer president S. Robert Contiguglia in a statement from Chicago. "We provided their federation with ample evidence of the extensive security measures in place. We continue to have every confidence that Seattle will provide a safe environment for the players and fans to enjoy an outstanding display of soccer."

While not as high-profile as Japan, the Venezuelan national team won five matches in 2002 World Cup qualifying. Venezuela has played the U.S. only once, a 3-3 draw in 1993.

U.S. team coach Bruce Arena has called up 10 players from the 2002 World Cup team and will begin training camp Monday in Portland.

"We're excited Venezuela has accepted the invitation to play us," Arena said. "Over the past two or three years, the Venezuelan national team has made great strides. I think they are perhaps the most improved team in South America. We are certainly looking forward to the challenge."

TICKET UPDATE

• FYI: Tickets for the U.S.-Japan match will be honored, but those who want a refund with the switch in opponents must do so by 5 p.m. Friday.

• REFUND: Refunds must be obtained at the place of purchase; tickets purchased by phone or over the Internet must be returned by calling Ticketmaster (Seattle 206-628-0888; Tacoma 253-627-8497) or logging on to ticketmaster.com.

• PRICE: Tickets ranging from $20 to $70 are on sale at all Ticketmaster outlets throughout Washington, Oregon and British Columbia; at the Seahawks Stadium ticket office; by phone (Seattle 206-628-0888; Tacoma 253-627-8497); and online at ussoccer.com. Groups of 20 or more can order through U.S. Soccer at 312-528-1290.

P-I reporter Angelo Bruscas can be reached at 206-448-8010 or angelobruscas@seattlepi.com

miva.jacksonsun.com By DENNIS SEID dseid@jacksonsun.com Mar 22 2003

Christy Powers drives roughly 100 miles daily between her home in Milan and her job in Lexington. So when it's time to put gas in her Dodge Stratus, she's looking for the best deal she can find.

Most of the time, she purchases her regular unleaded fuel in Lexington, which can be 6 to 8 cents cheaper a gallon than her hometown. With the war in Iraq getting under way, she fears those savings might soon disappear.

"I think we'll have to worry about a shortage, and everything will go up," she said.

No long lines of customers have flooded area gas stations.

In fact, it's pretty much business as usual, said Richard Jacobs. His company, River Oil Co., distributes gas to stations around West Tennessee, including his own Phillips 66 stations.

And when he went to his office Thursday morning, he was hit with another pleasant surprise.

"My jaw nearly hit the floor," Jacobs said. "We actually got a price decrease. It wasn't big, about 1 cents, but it was still a drop."

The average price for regular unleaded gas Friday in the United States was $1.70, while the average in Tennessee was $1.62, according to the Automobile Association of America.

Jacobs thinks the start of the war removed a great deal of uncertainty, and helped stabilize the market - if only briefly. The markets become volatile when people aren't sure what is happening.

Now that war has officially begun, everybody can relax a little.

"Strange, isn't it?" he replied. But Jacobs also warned that "we'll still see some volatility."

Janice Mealer drives a 2001 Dodge Ram - a six-cylinder, she emphasized.

"The guys driving the V-8s are really hurting," she said. "I put $20 worth of gas in my truck yesterday, and it didn't even fill it halfway."

She, too, thinks gas prices will creep upward, much like they have done in recent weeks.

"If it does, I'm going to start walking to work," she said.

Ashley Woods knows her pain. Her husband drives a 1994 Chevy Silverado, and $50 a week on gas is barely enough to keep it running. Ashley drives a Pontiac Sunbird, which should get better mileage.

"It should, but I drive like a bat out of hell," she said.

The Woodses live on a farm outside of Lexington, and so they have to buy gas for the tractors and 4-wheelers. It all adds up rather quickly.

"It can get pretty ridiculous," she said.

As for the Iraqi war forcing gas prices to go up, she has no doubt that will happen.

"But it will eventually get better and go back down," she said. "I hope."

Venezuela, after going through an oil workers' strike a couple months ago, is revving its oil production.

And OPEC (Organization of Petroleum Exporting Countries) has promised to take care of any supply shortages caused by the Iraqi war.

Jacobs also said President Bush would likely open the nation's Strategic Petroleum Reserves if the situation reached a point that fuel prices kept climbing. That would provide approximately 6-8 months worth of oil and gas.

"If necessary, he'll open the spigot," Jacobs said

• Dennis Seid, dseid@jacksonsun.com, 425-9644