<a href=ogj.pennnet.com>Oil&Gas Journal By OGJ editors

HOUSTON, Apr. 4 -- Crude oil prices rose moderately Thursday on speculation that the US-led war on Iraq could end soon, which subsequently would mean a return of Iraqi oil to markets before long.

The speculation of a quick victory by allied troops was prompted as US forces pushed toward Baghdad. Traders said an end to the war and the return of Iraqi oil to the market could cause a global supply surplus.

Meanwhile, the US Department of Energy reported Venezuela exported 843,000 b/d of oil to the US in March. That was about two-thirds of the levels shipped before Venezuela's general labor strike started in December, Reuters News Wire reported.

Reuters also reported on Friday that ChevronTexaco Corp. and Royal Dutch/Shell Group are gradually restarting Nigerian oil production that both oil majors had shut down 12 days ago due to ethnic clashes.

NYMEX movement The May contract for benchmark US sweet, light crudes gained 41¢ to $28.97/bbl Thursday on the New York Mercantile Exchange, while the June contract rose 5¢ to $27.26/bbl.

Refined products also closed higher with heating oil for May delivery climbing 1.31¢ to 73.17¢/gal. Unleaded gasoline for the same month improved by 0.77¢ to 87.16¢/gal.

The May natural gas contract lost 1.46¢ to $4.92/Mcf on NYMEX. "Facing a bearish build in storage inventories and mild weather forecasts that could stretch into summer, the dip was helped along by funds selling, and locals probing for technical sell stops into the $4.80s(/Mcf)," said analysts Friday at the Enerfax Daily.

Enerfax noted that the gas market remains in a downward trend, having fallen 48% since highs in late February.

Other prices In London, the May contract for North Sea Brent oil gained 29¢ to $25.50/bbl Thursday on the International Petroleum Exchange. Brokers said inventories still remain historically low and any significant output cuts as a result of the war in Iraq or any additional ethnic unrest in Nigeria could boost prices again by renewing fears of a crude shortage.

The May natural gas contract gained 1.6¢ to the equivalent of $2.56/Mcf on IPE.

The average price for OPEC's basket of seven benchmark crudes rose by 24¢ to $26/bbl Thursday.

Reuters, 04.04.03, 12:23 PM ET NEW YORK, April 4 (Reuters) - NYMEX crude oil futures stayed sharply lower midday Friday as shut-in Nigerian crude production began to restart and U.S. forces seized Baghdad's main airport, reinforcing hopes for a quick end to the war. Rising production from OPEC, evidenced by last week's surge in Saudi Arabia's exports to the United States and increasing shipments from Venezuela, remained a bearish factor. At 1215 EST (1715 GMT), NYMEX May crude traded 86 cents lower at $28.11 a barrel. Near the opening, it slumped $1.02 to a session low of $27.95. NYMEX prompt crude prices are down nearly $12 or 30 percent from a 12-year high of $39.99 reached on Feb. 27. In London, May Brent crude was down $1.08 at $24.42 a barrel. "The market is convinced that we will see rivers of oil flowing now that we have higher OPEC production and Nigeria is restarting previously lost production," said Phil Flynn, energy market analyst at Alaron Trading in Chicago. "Unless demand builds up as we go into the summer driving season, this influx of oil means prices will stay down." ChevronTexaco (nyse: CXV - news - people) said Friday it gradually restarted Nigerian production forced shut for 12 days due to ethnic unrest. It is aiming for Escravos crude production at 310,000 barrels per day, out of normal output of 440,000 bpd. Royal Dutch/Shell <SHEL.L> <RD.AS> said it had restarted on Thursday about 18,000 barrels per day of its Nigeria Forcados production at its Estuary flow station, after ethnic clashes forced it to shut production about two weeks ago. It said it planned to reopen other stations in the Southern Swamp of the western Niger Delta in "the coming days." Nigeria's sweet crude is a key gasoline maker for U.S. refiners heading into the heavy driving demand season at the end of May. Crude's heavy losses extended selling pressure from overnight that was sparked by news of U.S. forces taking control of Saddam International Airport, less than 10 miles from Baghdad This buttressed hopes that the war to oust Iraq's regime will end sooner rather than later, which "helps pave the way for Iraq's oil exports to resume before mid-year," said Mike Rothman, senior energy market analyst at Merrill Lynch. U.S. forces have secured 80-90 percent of Iraq's southern oil production capacity and aim to get Iraqi workers back on the job soon, according to a senior U.S. Army officer. Iraqi Information Minister Mohammed Saeed al-Sahaf said on Friday Iraq had no plans to use chemical or biological weapons against invading U.S. and British forces despite a threat to use "nonconventional " methods. Asked if Iraq would used weapons of mass destruction, Sahaf told a news conference: "No, not at all. But we will conduct a kind of martyrdom operations." Iraq denies U.S. and British accusations that it possesses weapons of mass destruction. The U.S.-led invasion of Iraq aims to disarm Iraq of those suspected banned weapons and drive President Saddam Hussein from power. Venezuela's restart of gasoline exports to the United States and crude exports rising to nearly two-thirds of pre-strike levels put more pressure on futures prices. Also in traders' focus are economic data indicating a struggling economy, as U.S. payrolls dropped by a worse-than-expected 108,000 in March, the government said Friday. The data highlighted the economy's fragility amid a war with Iraq that many economic analysts say has dampened hiring. NYMEX May gasoline futures were down 2.56 cents at 84.60 cents a gallon, trading rangebound between 84.00 to 85.80 cents. NYMEX May heating oil futures fell 1.47 cents to 71.70 cents a gallon, rangebound between 70.90 to 72.10 cents.

Reuters, 04.04.03, 12:12 PM ET   By David Ljunggren OTTAWA (Reuters) - The Organization of American States will hold an extraordinary summit in the second half of this year to discuss spreading economic and political chaos in South America, Canadian officials said Friday. Canada has long pressed for the summit but the idea initially ran into resistance from Brazil, which was reluctant to let Ottawa take the initiative on problems mainly affecting South America. Canadian foreign ministry spokesman Patrick Riel said a meeting Wednesday in Washington of officials from the 34-nation OAS had cleared the way for the summit. "A unanimous consensus was reached on holding a special summit in the second half of 2003," he told Reuters, saying no date or venue had yet been determined. Officials said in February that Mexico had volunteered to act as host. The OAS is due to hold its next Summit of the Americas in Argentina in early 2005, but officials say Canadian Prime Minister Jean Chretien feels it needs to take stock of "the convulsions" that have rocked some member states. OAS leaders held their last summit, which adopted an action plan to strengthen democratic institutions, in Quebec City in April 2001 "We are very happy that consensus was reached. It will help us keep what we had done in Quebec City on track," Riel said. OAS officials are due to meet early in June to iron out details of the summit, which Riel said would help address "the current challenges" facing much of the hemisphere. Argentina is suffering from its worst economic contraction in a century, one that has also spilled over into Uruguay. Venezuela is trying to recover from a two-month violent standoff between friends and foes of President Hugo Chavez that crippled oil exports. And deadly riots swept Bolivia in February while Colombia is in the grip of a decades-long civil war. Canada said another reason to hold an interim summit was the fact that since Quebec City about a dozen OAS members had elected new leaders. There are also tensions inside the grouping over the U.S.-led war on Iraq, which Canada and Mexico did not back. Mexico is unhappy with Washington's lack of interest in a deal to legalize the status of millions of undocumented Mexicans in the United States.

<a href=www.latintrade.com>latintrade.com 04/04/2003 - Source: Latin American Newsletters Venezuela is about to become the third Latin American country to go for a restructuring of its external debt this year. President Hugo Chávez was quite blunt about it: the country, he said last week, is simply unable to pay the US$5bn of external debt falling due this year.

Finance minister Tobías Nóbrega, who says he has been working on restructuring plans since late last year, has said the government completely rules out a moratorium or an enforced restructuring: what will be proposed is a voluntary debt swap; 'a market operation.'

Presentation of the proposals to bondholders will begin in the second quarter.

Central bank director Armando León says the problem to be overcome is the immediate bunching of debt-service obligations. Already in the first quarter Venezuela had to pay out US$950m –under the pressure created by the opposition shutdown of the oil industry.

In the second quarter another US$1.2bn fall due (two- thirds of that in June). In the second half of the year, another US$2.2bn.

Oil-generated revenues are crucial to the country's payment capacity. In January, transfers from the state oil company PDVSA were negligible; much of what was earned had to be spent on importing petrol. In February, they only amounted to US$200m –about a sixth of what would be expected in a year with fairly high oil prices.

This situation is only now beginning to improve. In March, PDVSA has been transferring an average US$150m a week. The oil company projects an increase to somewhere between US$200m and US$400m a week in April-May.

[Planning minister Felipe Pérez has come up with his own set of figures. Oil receipts, he says, are now higher than pre-strike levels. Revenues for last week increased to around US$625m, compared to US$300m in November.]

After that, and assuming that oil prices do not fall too much, revenues could reach about US$1bn a month –enough, says León, to meet debt-servicing obligations and keep the country's international reserves at an acceptable level.

Without counting the Fiem 'rainy-day' fund (into which the government has had to dip heavily in the past few months), reserves stood at just under US$13bn in the last week of March. This is a little more than US$2bn more than at the end of January, and owes much to the exchange controls that have cut drainage to a trickle.

Venezuela's external debt totals US$22.4bn; its domestic debt, US$7.4bn.

Reuters, 04.04.03, 12:06 PM ET CARACAS, Venezuela, April 4 (Reuters) - Car sales in Venezuela fell 60.9 percent in March from year-earlier levels as the country's economic crisis eroded business, the Venezuelan Automobile Chamber said on Friday. A total of 4,664 cars were sold in March, compared with 11,929 units in March last year. Accumulated sales to March were 12,876 units, a slide of 73.3 percent from the same period last year. Car sales have dropped as Venezuela has struggled with deep recession and political instability. A two-month general strike in December and January battered sales further and tight currency curbs introduced in February have also cut into business. The companies affiliated with the chamber, known as CAVENEZ, are DaimlerChrysler AG's (nyse: DCX - news - people)<DCXGn.DE> DaimlerChrysler de Venezuela, Fiat SpA's <FIA.MI> Fiat Automoviles, Fiat affiliate IVECO Venezuela, Ford Motor Co. (nyse: DCX - news - people), General Motors Corp.'s (nyse: DCX - news - people) General Motors de Venezuela, AB Volvo <VOLVb.ST> affiliate Mack de Venezuela, Mitsubishi Motors Corp.'s <7211.T> MMC Automotriz and Toyota Motor Corp.'s <7203.T> Toyota de Venezuela. The figures represent the total vehicle sales in Venezuela and also include car models made by non-members of CAVENEZ, such as Mazda Motor Corp. <7261.T> and Volkswagen AG <VOWG.DE>.