URLLONDON, March 27 —  Oil prices surged back above $30 a barrel on Thursday as signs of a protracted war in Iraq fueled fears of shortages, with Nigerian exports crippled by political unrest.        PRICES HAVE RISEN 12 percent this week as a fall in U.S. gasoline stocks — at a time when refiners are normally scrambling to build inventory — fueled fears of tight supplies for summer vacation driving demand.        U.S. crude futures added $1.82 to hit $30.45 a barrel in New York, rebounding from a 25 percent drop last week when traders bet heavily on a quick U.S. victory with little disruption to oil flows.        “Current oil prices are not fully reflecting the tightness in inventories and the gasoline problem, let alone the current geopolitical context,” said Paul Horsnell of U.S. investment bank J.P. Morgan.        “Inventories need to start climbing very sharply to give any chance of avoiding a huge spike in gasoline prices,” he said.        Brent crude oil climbed $1.56 to $26.85 per barrel in London.        The U.S. army officer in charge of rehabilitating Iraq’s southern oilfields on Thursday warned it would take several months to get the fields pumping again because of suspected booby traps, blazing wellheads and neglect.        Military analysts expect the U.S. campaign to occupy Iraq, which ranked as the world’s seventh-largest exporter before the war, to take up to another month.        U.S. President George W. Bush and British Prime Minister Tony Blair appealed to the United Nations to resume the oil-for-food program immediately to address humanitarian needs.         NIGERIA        Bloody clashes between warring tribal factions in Nigeria’s oil-rich Niger Delta have shut down 40 percent of oil output from Africa’s biggest producer.        Ethnic leaders have agreed to a cease-fire which should allow foreign multinationals, including Royal Dutch/Shell and ChevronTexaco, to return, but companies said it was still unsafe to do so.        Nigerian crudes produce a high yield of gasoline when refined, ideal for U.S. refiners who should be cranking up gasoline output ahead of the peak demand season in summer.        The U.S. government released data on Wednesday showing gasoline stocks declined 1 percent last week at a time they should be rising. Unleaded gasoline futures in New York gained 5 percent to 97.20 cents per gallon.

Weather clears, aiding coalition advance on Baghdad U.S. to send 100,000 reinforcements to Iraq U.S. airstrikes wipe out Iraqi convoy near Karbala More than 30 U.S. Marines reported injured in "friendly fire" incident U.S. paratroopers secure airfield in northern Iraq Warplanes bomb Baghdad into morning        The OPEC exporting cartel has said it will fill any supply disruption due to Iraq or Nigeria, although the recent price slump has dissuaded it from releasing any extra supply.        “There is more oil in the market than it can absorb. This is obvious from the fact that prices have dropped,” OPEC President Abdullah al-Attiyah told reporters on Thursday.        Iraqi oil exports ground to a halt as the U.S. launched its offensive.        But supplies from other Middle East producers, accounting for 40 percent of world exports, have increased recently and shipping from the Gulf has proceeded normally. Kuwait initially shut a few oil wells near the Iraqi border but was restoring some production on Wednesday.        Saudi Arabia, Kuwait, Iran, Qatar and the United Arab Emirates ship about 15 million barrels per day through the Gulf.        Fears that Iraq might destroy oilfields in a replay of the massive damage inflicted by retreating Iraqi troops in the 1991 Gulf War have not materialized.         More Oil & Energy news •  Iraqi oil sales mired in the fog of war •  Energy refund ordered for California •  El Paso to settle pricing scandal •  Gas prices fall over past week •  Gas prices rise less than 1 cent

<a href=www.upi.com>URL By Bradley Brooks UPI Business Correspondent From the Business & Economics Desk Published 3/27/2003 7:00 AM

RIO DE JANEIRO, Brazil, March 27 (UPI) -- Latin American stock markets fared reasonably well during this volatile week that saw military action begin in Iraq.

Indexes across the region, like those around the globe, tracked the daily news out of the Middle East.

But signs of vulnerability to a prolonged war in Iraq did emerge in markets across Latin America, with analysts saying that the short- and medium-term scenario will very much depend upon how quickly the allied forces get a grip on Iraq.

"Right now they're just trading on par with other stock exchanges, based on the flow of the news of the war," said Roger Oey, an analyst with BBV Corretora in Sao Paulo, about Brazilian equities.

"But, certainly, let's say we have a conclusion to this conflict soon, the stocks, like those around the world, would react positively."

Brazil -- Latin America's largest economy -- is looking to make strong gains not only should war end soon in Iraq, but because of stocks that analysts say are still highly discounted from fears of the country defaulting.

"Brazil is a unique case. All the stocks were pricing in not only the risk of a war, but also that the government would introduce policies that would lead to inflation, high interest rates, and more a social-benefits driven policy," Oey said.

"But now the government ... is promising to push through strong (economic and legal) reforms. In terms of economics, Brazil is too discounted for the present scenario."

Currencies across the region are faring quite well, fueling further investor optimism.

Argentina's peso rose to an 11-month high Wednesday, as analysts said exporters earning in dollars bought up the local currency.

The peso rose 1.36 percent to 2.89 to the dollar. The peso has gained more than 15 percent since the beginning of the year.

Brazil's currency -- the real -- has shone of late, despite a drop of 0.42 percent Wednesday to 3.38 to the dollar.

But the decline in Brazil is somewhat worrying for investors, as analysts blamed it on the notion of a longer war in Iraq, which would send oil prices up and spur inflation in the country.

Additionally, all the countries in the region are extremely vulnerable to dampened emerging-market investors' appetite for pumping cash into Latin America.

One soft spot for Brazil this week has been labor relations.

On Wednesday, metalworkers began a planned strike in Sao Paulo, the biggest labor walkout since President Luiz Inacio Lula da Silva took office on Jan. 1.

The workers are seeking higher pay and are organized by one of Brazil's biggest unions, Forca Sindical. Wednesday's action affected 40 factories and included some 23,000 workers.

Union organizers say 280,000 workers might eventually strike. They are demanding pay raises of 10 percent, saying inflation has risen too fast for wages to keep up.

As for the markets, Brazil's Bovespa stock index climbed 1.4 percent to 11,158 last Thursday, as investors looking for the war in Iraq to quickly end pushed the index to its highest level in two months. Aircraft manufacturer Embraer gained 3.8 percent, while state-run oil company Petrobras added 1.9 percent.

On Friday the index rose 2 percent to 11,377, as investors were bullish on the progress of the war in Iraq. Long-distance company Embratel gained 6.6 percent, while Embraer added another 6.1 percent.

Monday brought a steep loss on Wall Street, which sent Latin America down with it.

The Bovespsa lost 2.8 percent to 11,052. Investors were suddenly faced with a war in Iraq that might drag on longer than hoped. Embraer plunged 7.2 percent, while Embratel lost 5.4 percent.

The Bovespa gained 1.6 percent to 11,232 Tuesday as investors gained confidence that allied troops were making solid progress. Telemar gained 1.8 percent while Petrobras added 1.9 percent. Embraer, however, dropped 4 percent after revising down its forecast on jet deliveries. Swiss International Airlines told Embraer early Tuesday that it was halving an order for 60 jets.

Wednesday brought a loss of 0.23 percent to 11,206. Utility Eletropaulo lost 2.24 percent, Telesp Celular shed 3.39 percent in heavy trade, and Petrobras lost 1.15 percent. Investors were weighed by President George W. Bush's reiteration that the war in Iraq was going to be a protracted affair.

In Mexico, the IPC index finished last Thursday up 0.5 percent to 6,048 in thin trade. Investors held out hopes for a short war in Iraq. Wal-Mart de Mexico, or Walmex, rose 3.3 percent, while cellphone giant America Movil lost 1.2 percent.

Markets were closed on Friday for a holiday.

Monday brought a loss of 2.1 percent to 5,924 as the index followed Wall Street down. Worries on Iraq weighed. Fixed-line phone company Telmex lost 1.7 percent, while America Movil shed 2.7 percent. Walmex lost 1.2 percent.

The IPC rose 0.2 percent Tuesday to 5,938 as trade was quiet and all eyes were on Iraq. Walmex gained 1.6 percent.

On Wednesday the IPC gained 0.24 percent to 5,952. Mobile phone operator Iusacell gained 14.9 percent, Walmex rose 2.49 percent, and industrial group Alfa added 1.17 percent.

In Argentina, the Merval stock index gained 1.7 percent to end at 574.2. Grupo Financiero Galicia -- which controls the country's largest private bank -- added 3.3 percent.

Friday brought a gain of 1.9 percent to 585.4. The banking sector fared well as the government appeared open to helping bail out banks hit hard by the one-year banking freeze. Banco Frances added 6.3 percent and Grupo Galicia was up another 5.5 percent.

Monday saw the Merval following the region down, with the index falling 2.55 percent to 569.7. Banco Galicia lost 3.78 percent and Banco Frances dropped 1.63 percent as the government backed off slightly from its bail-out talk.

The Merval gained 0.81 percent to 574.2 Tuesday as banks rose. Banco Frances added 2.9 percent while Grupo Galicia gained 3.9 percent. Steelmaker Acindar added 3.4 percent.

On Wednesday the Merval lost 1.02 percent to 568.4. Acindar lost 3.28 percent, Banco Santander fell 4.76 percent, and Banco Frances lost 1 percent.

Chile's IPSA index added 0.6 percent to 1,023 on Thursday. Banco Santander gained 3 percent. The index closed absolutely flat on Friday, with investors sidelined by the action in Iraq.

Monday saw a loss of 1.1 percent to 1,012 for the IPSA. Telecom CTC Chile lost 1.7 percent. Tuesday brought a loss to 1,011 in quiet trade. Banco Santander lost 2.3 percent.

The IPSA lost 0.33 percent to 1,008 Wednesday as investors worried about the outcome of the war in Iraq.

The IBC index in Venezuela ended Thursday down 0.2 percent at 8,442. On Friday the index gained 0.7 percent to 8,504. Nacional Telefonos de Venezuela, or CANTV, which comprises 40 percent of the index, added 0.4 percent.

On Monday the IBC lost 0.7 percent to 8,446 as CANTV lost 2 percent. Tuesday saw a loss of 0.2 percent to 8,423 for the index. On Wednesday the index rose slightly to 8,429.

URL Thursday March 27, 2003 10:24 AM

CARACAS, Venezuela (AP) - Venezuela will grant safe conduct to anti-government labor leader Carlos Ortega when he goes into exile in Costa Rica, officials said Wednesday.

Ortega, president of the million-member Venezuelan Workers Confederation, took refuge in the Central American nation's embassy to avoid arrest on treason and rebellion charges stemming his role in leading a crippling nationwide strike.

``Safe conduct has been granted, which will facilitate Mr. Ortega exit: first from our embassy, and secondly, from Venezuela to our country,'' said Costa Rican Ambassador Ricardo Lizano.

It wasn't immediately clear when Ortega would leave Venezuela.

The general strike was aimed at forcing the resignation of President Hugo Chavez and early elections.

Chavez has demanded 20-year prison sentences for Ortega and co-strike leader Carlos Fernandez, saying that they must be punished because the work stoppage cost Venezuela an estimated $6 billion, caused fuel and food shortages and suffering among the nation's poor majority.

Ortega slipped into the Costa Rican embassy on March 14, and that nation granted him asylum after he expressed fears that his life could be in danger.

Last week, an appeals court ordered the release of Fernandez, who escaped charges of rebellion. Fernandez was previously held under house arrest.

URL Thursday, March 27, 2003 By JO DEE BLACK Tribune Staff Writer

The scale finally tipped in the balancing act played at Joe's Delivery Service. The in-town courier, which delivers everything from prescriptions to paperwork, recently increased rates for the first time in four years.

Owner Joe Murray says escalating fuel prices are to blame.

"I've got to stay competitive to make a living," he said. "I have to make my payments, too. It's tough."

In Great Falls, businesses that offer delivery services are dealing with higher fuel costs in a variety of ways.

Murray said he used to spend about $800 a month for fuel for his business' three delivery trucks. Today, the bill for gasoline is about $1,000 a month and he expects it to go up to $1,200 a month soon.

A propane-operated van Joe's Delivery Service added to its fleet a few years ago is getting more use these days. The propane-powered vehicle gets about eight miles per gallon, compared with the 11 or 12 miles per gallon the gasoline-operated vans get.

"But with the price of gas now, it really doesn't matter," Murray said.

Regular unleaded gasoline is running about $1.63 a gallon in Great Falls; diesel prices are about $1.85 a gallon. A gallon of propane vehicle fuel costs about $1.26 in Great Falls.

According to the AAA Fuel Gauge Report, the average price of unleaded regular gasoline in Great Falls was $1.25 a gallon one year ago, diesel was $1.27.

Shumaker Trucking tacked a fuel surcharge on its bills to trucking customers to deal with higher prices.

"We've had to do it two or three times in our history," said owner Gene Shumaker. "Our customers realize what's going on. They all have to put fuel in their own vehicles."

Deliveries at Kranz Flowers and Gifts are carefully planned to maximize fuel economy, said owner Doug Forbes.

"We are trying not to raise our delivery costs and we are watching our routing to make sure deliveries are made in areas of town once or twice, not three and four times," Forbes said.

He recently hired a second driver to eliminate delivery backtracking.

"We've been through this before," Forbes said. A couple of years ago he traded in the shop's eight-cylinder vans for more fuel efficient models and cut the monthly gas bill in half from about $1,000 to $500.

Shumaker is optimistic prices will come back down, but Murray isn't betting on it.

"From what I understand, there's no end in sight," he said.

Crude oil prices tumbled March 17 after President Bush announced the United States would go to war with Iraq unless Saddam Hussein left within 48 hours.

On March 12, the spot price of a barrel of crude oil on the West Texas Intermediate market was $37.87. The price dropped below $30 per barrel on March 19 for the first time since Dec. 13, according to the U.S. Department of Energy's Energy Information Administration.

The speech removed uncertainty over whether the war would happen, a factor pushing prices higher, according to the Energy Information Administration.

On Monday, prices at the pump for regular unleaded gasoline fell, after going up 13 of the past 14 weeks. Nationwide, the average price was $1.69 per gallon, still 34.81 cents higher than one year ago, according to the Energy Information Administration.

Spot prices for crude oil are rising again because of uncertainty about the length of the war. Oil exports from Iraq have halted.

In addition, unrest in Nigeria forced companies there to reduce exports by 800,000 barrels a day.

On the West Texas Intermediate market, the spot price for a barrel of crude oil was $27.18 Friday. On Tuesday, the price was $33.42.

Shakiness about the war comes at time when the U.S. oil market is rebalancing from shortages caused by a nationwide strike in Venezuela.

Exports from that country nearly stopped in December when opponents of Venezuela's President Hugo Chavez organized the strike. Of the 9 million barrels of crude oil imported daily by the United States, about 1.3 million are from Venezuela.

Oil production in that country has resumed. Striking workers say about 2.4 million barrels of oil are being produced a day, but the government claims that it's putting out more than the 3 million per day prestrike level.

URL By Andrew Caffrey, Globe Staff, 3/27/2003

egardless of what happens in Iraq, American drivers could see another bout of high pump prices this summer because of political tensions elsewhere in the world.

Political violence in Nigeria has cut production of high-grade crude oil used for gasoline in the United States by 40 percent, forcing refineries on the East Coast in particular to scramble for replacement stocks and bidding up prices in the process. Meantime, Venezuela's state-owned petroleum industry, which still hasn't fully recovered from the civil strife begun in December, is in such poor condition that some analysts warn it may see a drop in output.

These developments come when stocks in the United States are so low that the US Energy Information Administration yesterday said ''it will likely take many more weeks, or months, before US petroleum inventories return to normal levels.''

Despite a recent surge of imports, the agency said gasoline stocks are declining when suppliers should be reloading ahead of the peak summer driving season. Future prices for gasoline for April delivery rose 4 cents a gallon, or 4.44 percent, to 92.4 cents yesterday after the government released its report. And analysts say the system is so tightly stretched that even small, unanticipated developments could push prices up further.

''It doesn't look like we're going to have a lot of relief on the gasoline prices,'' said Michael Lynch, president of Strategic Energy & Economics Research Inc., a Winchester consulting firm. ''Right now, we're getting stung by yellow-jackets -- a lot of smaller things that are creating problems. When the market gets really tight, little operational problems that you wouldn't ordinarily notice make a really big difference.''

Another looming worry: disquiet among oil workers that could lead to a strike in Colombia, which sends its crude to American states located on the Gulf of Mexico for refining. If Colombia ''went down, clearly we would be looking at a very tight situation for the US Gulf for gasoline production,'' said David Fyfe, an oil analyst for the International Energy Agency in Paris.

The near-term global outlook for oil supply and prices continues to see-saw. Prices had plummeted to $26 a barrel, from $38, when it looked like the US-led military coalition was heading to swift victory in Iraq. That in turn had begun to pull down retail gasoline prices. But now oil prices have been creeping back up as those forces encounter stiffer resistance from Iraqi fighters, in addition to concerns about the situation in Nigeria. Yesterday, oil futures on the New York Mercantile Exchange rose 66 cents, to $28.63 a barrel.

One big factor in the earlier drop is increased output from Saudi Arabia and other producers to keep spiraling prices from harming the US economy, and to compensate for lost Venezuelan and Iraqi suppliers. Indeed, some analysts are predicting that the Saudis and other producers may soon cut back output to prevent a glut that could collapse prices.

But the rosy macro outlook doesn't necessarily filter down equally to local energy markets.

Saudi Arabia's oil, for example, is high in sulphur, and so most of it is sent to refineries in the US Gulf region that are equipped to process it into gasoline. East Coast refineries, meantime, got about 26 percent of crude oil supplies from Nigeria and Venezuela last year, while Venezuela provided about 10 percent of the region's stocks of finished gasoline, leaving the region vulnerable to problems in those countries.

Venezuelan oil production has bounced backed markedly since the strikes petered out, with analysts saying oil production is now around 2.4 million barrels a day. But they add that it will be weeks before the state-owned petroleum company will be exporting gasoline from its refineries in significant amounts.

Moreover, the Venezuelan system is in poor shape after the strike, and even in the best of times production from existing wells declines so quickly that analysts say the system requires billions in ongoing investment.

But the Chavez government fired thousands of workers, including engineers it needs ''to arrest oil field decline rates,'' said Fyfe of the International Energy Agency, and Venezuela faces such a cash crunch after the strike that yesterday President Hugo Chavez said the country needs to restructure its foreign debt.

''You are going to see a fall in production. The problem is, you don't know how much that's going to be,'' said David Voght, managing director of IPD Latin America, an energy consultancy in Caracas. Voght cautioned that the Venezuelan oil executives are ''in an uphill battle and are going to encounter a lot of difficulties.'' A spokesman for Petroleos de Venezuela SA, the state oil company, didn't return messages seeking comment.

Meanwhile, the situation in Nigeria remains highly volatile since the violence that erupted in the Niger Delta March 12 prompted three major oil companies to shut or curtail facilities and evacuate workers, cutting the nation's oil output by 800,000 barrels a day. Yesterday ethnic Ijaw militants called for a cease-fire if the government and a rival tribe would agree to renegotiate political boundaries for national elections April 19. A spokesman for the rival warring tribe of Itsekiris seemed to reject the Ijaw call, according to wire service accounts.

Producers elsewhere in Nigeria are believed to be increasing output, which may partially offset current declines. But analysts said the intensity of the current fighting has them worried that the instability in the Niger Delta could last for months.

The war with Iraq is the wild card in all of this global turmoil. If the war does indeed go quickly, then crude prices could fall further, pulling down gasoline prices. Already the decline in crude prices from the March highs has been ''so profound'' that gas prices should be in the $1.50 to $1.60 a gallon range by summer, down from the $1.69 a gallon national average, Energy Security Analysis Inc., a Wakefield energy consultancy, said yesterday.

Another potential source of relief could come from additional exports from Europe, and from Asian producers drawn by higher prices in the United States. However, Fyfe of the International Energy Agency warns that US gas prices might not fall as much as oil prices if problems in Nigeria and Venezuela persist.

And if the war takes longer than expected, and the United States is not able to return idle Iraqi oilfields to production anytime soon, crude prices could continue marching back up.

''If crude stays high, and your gasoline develops this tightness, you can get gasoline bounce to over $2 a gallon quite quickly, and it might get worse from there,'' said Jan Stuart, who heads up research on global energy futures for investment bank ABN Amro Inc., in New York.

Andrew Caffrey can be reached at caffrey@globe.com