Friday April 4, 2:24 PM By Irene Kwek Of DOW JONES NEWSWIRES

SINGAPORE (Dow Jones)--Crude oil futures traded mostly in a tight range during Asian trade Friday, as market participants took a breather after volatility in recent sessions.

At 0610 GMT, May crude futures on the New York Mercantile Exchange stood at $28.85 a barrel, down 12 cents from the floor trade close. In New York Thursday, Nymex May gained a modest 41 cents to $28.97/bbl, as some traders covered short positions on perceptions that the market had deeply oversold in the previous sessions.

"After (the recent) extreme volatility, the market needs some sort of breather to regain the energy. But we do not know when it will resume. Breaking news out of Iraq will be the key factor to look out for," a trader based in Singapore said.

"It's going to be range-bound on a lack of fresh factors, although the tide has changed somewhat. The direction is more biased to further losses," he added. "Oil prices are following renewed perception that the U.S. is making good headway on the war front."

Volume was moderate in after-hours electronic trading, with 1,629 lots traded as at 0545 GMT, with major players keeping to the sidelines, one U.K. broker observed.

"It's been a very quiet night and the majority of the volume is from 'local traders' - people who are trading their own accounts," he said. "I still think we're going to have a down day. (The overnight rally) didn't do it on any fundamental news, and people will be looking to sell into any rallies."

Front-month May crude will likely be supported initially at $28.60/bbl, and at $28.20/bbl below that, the broker said.

"It's going to be day to day developments (in the Iraq war) that the market will be watching. The concern in Nigeria has somewhat been quelled ... now it's just mainly Iraq and whatever comes from there in terms of developments and progress the coalition troops are making," the Singapore-based trader said.

Crude Futures Locked In $26-$32/bbl Range

Looking further ahead, U.S. crude futures could be locked in a tight range in the month ahead.

"After the volatility that we've had in the last two or three weeks, (crude) oil will trade in a relatively narrow range of $26-$32/bbl," said David Thurtell, commodity strategist at Commonwealth Bank based in Sydney.

"On the downside, if prices weaken by another few dollars, there will be talk by the Organization of Petroleum Exporting Countries of cutting back quotas. On the upside, if prices go through $32/bbl, OPEC will start talking about an increase in quotas," he said.

While fluctuations in prices will depend on day-to-day developments from the war in Iraq, low oil stocks around the world may help to keep prices supported.

"In terms of the risks, prices may stay at the high (end of the) range because oil stocks around the world are very, very low," Thurtell said.

"When stocks are low, there is a high risk that there is some sort of outage, from war or civil strife that we've seen in Venezuela and Nigeria. OPEC is producing close to capacity, so there's not much margin for error," he added. "The risks are still skewed for prices to stay in the high-$20s, rather than push down to the mid-$20s."

On the war front, U.S. forces occupied part of Baghdad's airport before dawn Friday, putting them less than 10 miles from the seat of Saddam Hussein's government and closer to gaining control of a key lever of power.

U.S. Special Operations forces raided one of Saddam Hussein's favorite residences - the Tharthar Presidential Palace northwest of Baghdad - seizing documents but failing to find the Iraqi leader or his sons.

-By Irene Kwek, Dow Jones Newswires; 65-64154062; irene.kwek@dowjones.com

-Edited by Simon Hall

<a href=www.chronwatch.com>Chron watch Posted by the ChronWatch Founder, Jim Sparkman Friday, April 04, 2003

      Somehow, the ''Rogue Editor'' at the Chronicle continues to slip banned material past the scrutiny of Chron editors, Mrs. Robert Scheer and Mr. Sharon Stone.  Admittedly, he has to place the  material in rather inconsequential spots in the paper, but nonetheless it represent a great accomplishment on his part.

Longtime Iraqi Dissident by Anna Badkhem        What's this? A Chron article that actually talks about the evils perpetrated by the anti-war protester's favorite dictator, Saddam Hussein.  Normally, that is of no interest to the protesters or, for that matter, to the Chron editors.

       Ahmed's face lit up with the big, warm smile he reserves for his wife when her spirit is low.  Soon, he reassured her, his struggle against the repressive rule will be over. The U.S.-led air strikes that have been shaking their house nightly are bound to end the dictatorship, he believes, finally setting the country free.

       But as they listened to American B-52 bombers rumble heavily over the rooftop of their rented house in the Kurdish haven in northern Iraq, Ahmed and Afrah knew: Like their family's awful memories, many scars will have to heal before Iraq becomes whole again.

       If nothing else, Ahmed will always have his eight children to remind him of the pain Iraq has endured during the 34 years of Baathist reign.

State Finds No fixing of Gasoline Prices by Verne Kopytoff        Verne writes an article that is anathema to the liberal line of Gray Davis and Barabara Boxer. It seems that a study commissioned by Davis himself shows that the recent increase in gasoline prices are the result of natural market forces. Shock and horror! This is a concept that is foreign to the Chronicle and these two liberal politicians.  For them, there is no law of supply and demand.  It never existed, despite what you were taught in Economics 101.  To these anti-business liberals, all price increases are the direct result of the actions of greedy corporations. What with the ''shock and awe'' pounding of the corporate world by the Chronicle and the liberal politicians, is it any wonder that California is dead last in the ratings of CEOs on business climate.

       An investigation ordered by Gov. Gray Davis into California's escalating gasoline, diesel, and natural-gas prices has found no evidence of illegal manipulation.

       Rather, the probe attributed the higher costs this year primarily to tensions over the war in Iraq, a strike in Venezuela, and an unusually cold winter on the East Coast.

       The conclusion, to be officially released today, is a setback for those who believe that the soaring gas prices and heating bills this year are due to collusion. But it is an obvious victory for the oil and natural-gas industries, which have maintained all along that market forces, not manipulation, were responsible.

The Houston Chronicle.com April 4, 2003, 9:36AM By MICHAEL DAVIS Copyright 2003 Houston Chronicle

As Venezuela's oil production slowly returns to normal, the OPEC member is turning its attention to restoring its battered reputation after strikes shut down its national oil company.

The national strikes, aimed at ousting Venezuelan President Hugo Chavez, have left Venezuela's economy in a shambles and its oil company, Petroleos de Venezuela SA, or PDVSA, with a severely depleted work force.

Venezuelan officials say the country's production is back up to 2.9 million barrels per day, but many in Washington, D.C., and elsewhere are skeptical of those numbers.

"It is tough to pin down exactly what they are producing, but even the political opposition in Venezuela says it's about 2.4 million barrels and possibly a bit higher," said George Beranek, manager of market analysis for PFC Energy in Washington. "I think they have recovered a lot faster than was expected."

To counter such widespread skepticism, PDVSA is mounting a public relations campaign aimed at restoring confidence in the country's oil sector. But it will take more than a slide show to convince the industry that things are back to normal.

Venezuela could make a significant step towards restoring confidence in its ability to be a reliable supplier simply by being more candid, said Michelle Foss, director of the University of Houston Energy Institute.

"They could tell everyone what is really going on, for starters," Foss said. "Nobody really believes those production numbers. We don't know how much of the oil they are shipping out may be coming from storage, for example."

Economy still shaking

Oil is the paramount component of Venezuela's economy, providing the majority of revenues to the government. The shutdown of the oil industry is still shaking up the economy.

The Venezuelan Federation of Chambers of Commerce and Industry, the country's largest business organization, estimates about 15 percent of the country's companies closed in the first quarter. An official with the groups described the country's situation as an "economic disaster."

Officials from PDVSA will be meeting with U.S. lawmakers, investors, financial institutions and think tanks to repair the country's reputation as one of the leading suppliers of crude oil to the United States.

The road show will stop in Houston, Dallas and New York, among other U.S. energy centers, to make its case that Venezuela is a reliable oil supplier.

Houston-based ConocoPhillips is a partner with PDVSA in two major heavy-oil projects in Venezuela. Exxon Mobil and ChevronTexaco are also involved in heavy-oil projects there.

PDVSA officials say the company is working to restore production that was shut down during the strike and are making progress.

"We are already back in our production areas," said Fadi Kabboul, minister counselor for energy affairs at the Venezuelan Embassy in Washington. "We have all of our light and medium wells producing at the same levels before the stoppage, and we are recovering about 80 percent of our heavy crude."

Light and medium wells refer to the weight of the oil produced. Lighter oil is easier to produce, transport and refine. Venezuela produces a broad range of oils, including some of the world's heaviest oil.

Terminals for loading oil for export have been visited recently by officials from companies such as Shell and Exxon Mobil to ensure they comply with international standards, Kabboul said.

During the strike, crews refused to dock their tankers at the oil terminals because of insurance concerns.

The Venezuelan ambassador to the United States, Bernardo Alvarez, met last week with Sen. Jeff Bingaman of New Mexico, the ranking Democrat on the Senate Energy Committee, to assure him the country will be able to meet its obligations to its U.S. customers.

"The ambassador told me that the strike is behind them now and that Venezuela has increased production very substantially," Bingaman said. "He also said that the political situation for President Chavez is moving toward a resolution, and that Venezuela is in a position to meet a substantial amount of our energy needs."

Top managers were fired

Compounding the skepticism over production numbers is the fact that many of the white-collar professionals who dealt with the country's oil production and sales day to day were fired during the strike.

"Some say more than half of PDVSA's employees were lost in the strike," Foss said. "What is clear is that all of the experienced managers that people were accustomed to dealing with are out of the picture."

PDVSA says it reduced its work force by 43 percent because of the strike. The biggest reduction came from the ranks of executives and professionals, which were cut by 55 percent and 59 percent, respectively, according to the company.

The loss of many of midlevel managers has thrown logistics at the company into disarray. Tasks such as billing, accounting, payments and tracking production flows are all in doubt now, Foss said.

As part of its marketing campaign, PDVSA projects that its production will be over 3 million barrels a day by year's end.

During March, Venezuela exported an average of 843,000 barrels of crude oil per day and 247,000 barrels of refined products per day to the United States, according to figures provided by PDVSA.

Before the strike, Venezuelan oil imports to the United States were running at 1.4 million barrels per day, the Energy Information Administration said.

Despite the widespread uncertainty over production volumes, there have been recent indications that the country's oil industry is returning to normal.

Gasoline exports from PDVSA's refinery on the Caribbean island of Curacao resumed last week. The country had halted gasoline exports, using all of what little it was producing or had in storage domestically. Now, Venezuela's refineries are able to produce enough to begin exporting gasoline again.

All of the nation's refineries should be back to normal by mid-May, PDVSA President Ali Rodriguez said last week.

Some heavy oil lost

Some of the country's heavy-oil production was lost permanently after being shut in, but estimates vary on how much. The International Energy Agency in Paris estimates 400,000 barrels of Venezuelan production was lost because of the strikes.

U.S. companies with major heavy-oil projects in the country report operations are back to normal for the most part.

Houston's ConocoPhillips is a partner in two of the largest heavy-oil projects, Petrozuata and Hamaca. Before the strike, Petrozuata was producing 120,000 barrels of oil per day, with about half going to ConocoPhillips, company spokeswoman Linsi Crain said.

Petrozuata's production ceased in December. It resumed in mid-March and is back to to its pre-strike levels, she said.

Hamaca was producing 46,000 barrels per day, 18,000 of which went to ConocoPhillips, and it is producing as it was before the strike. Upgrading facilities for the heavy oil, which must be processed so it can be moved via pipeline and then onto a tanker, are also back in operation, Crain said.

"Hamaca was still being ramped up at the time of the strike," Crain said. Hamaca is projected to hit a peak production of 190,000 barrels per day.

Exxon Mobil is partnered with PDVSA in a heavy-oil project called Cerro Negro. Heavy oil is mixed with naptha and moved to the north where it is upgraded and then exported to the companies' refinery in Chalmette, La.

Operations were closed in Cerro Negro after the strike began because of a lack of a reliable natural gas supply to the plant, said Bob Davis, an Exxon Mobil spokesman in Houston. Now production is back to normal at 120,000 barrels of heavy oil per day, Davis said.

<a href=www.sfgate.com>SFGate.com Thursday, April 3, 2003
(04-03) 19:44 PST CARACAS, Venezuela (AP) --

The government fired 828 more employees from the state oil monopoly for participating in a two-month strike to oust President Hugo Chavez, the company said Thursday.

The latest dismissals bring the total number of fired employees to 17,871 -- almost half the 38,000-strong work force at Petroleos de Venezuela S.A., a company spokesman said.

Most workers, including management, joined the national strike to demand Chavez's resignation or early elections. The stoppage paralyzed the world's fifth-largest oil industry and cost Venezuela $6 billion but fizzled out last month without achieving its goal.

Despite the reduced personnel, the government says it has restored crude oil production to pre-strike levels of more than 3 million barrels a day. Fired executives say output is 2.4 million.

The government also says it is taking advantage of the strike to reorganize the monopoly, reduce its excess bureaucracy and increase government control over the company.

Chavez's opponents accuse him of riding roughshod over the country's democratic institutions in his self-described "revolution" to help Venezuela's poor.

Chavez in turn accuses the opposition of incessantly conspiring to overthrow his elected government.

<a href=news.ft.com>Financial Times By Carola Hoyos, Energy Correspondent Published: April 4 2003 5:00 | Last Updated: April 4 2003 5:00

As Baghdad looms larger in the sights of US and British soldiers, the nightmare of oil at $50 or even $100 a barrel is fading.

Although oil prices will remain vulnerable as the battle for Baghdad begins, they are a long way from their March high of $39.99 a barrel.

And as long as most of Iraq's oil wells remain intact, analysts say, there is little chance that prices will reach the $41.15 peak prices hit after Iraq invaded Kuwait in 1990.

Two main factors explain why this war with Iraq has had far less impact on oil prices than the last: timing and the fact that Saddam Hussein has not managed to wreak havoc in the oilfields as he did in 1991.

Then his troops damaged 700 Kuwaiti oil wells, leaving the emirate to spend two years rehabilitating its oil sector before it could return to full production.

Since the beginning of the current conflict, the world has lost 2.4m barrels a day of Iraqi production, which has been made up by Saudi Arabia and other Opec members, who increased their output quota to 24.5m barrels a day in January and then suspended restrictions altogether at the start of the conflict.

Spencer Abraham, US energy secretary, yesterday confirmed Opec's key role, saying: "We've seen a substantial increase in Opec-10 production, more than enough to compensate for losses in Iraq and Nigeria."

But perhaps the most important factor was the timing of President George W. Bush's decision to launch his campaign, atatime when Venezuela's exports were recovering from the interruption in December and January caused by the country's national strike.

March also brought the first signs of spring to the northern hemisphere and a reduction in the level of oil required for winter heating.

This helped offset the loss of Iraq's oil and some of Nigeria's production, which was halted by ethnic violence ahead of this month's elections.

Oil refiners have even begun to rebuild their stocks, which earlier this year had fallen to levels not seen since the mid-1970s.

Meanwhile, the governments of US, Japan, Germany and South Korea were able hold on to their strategic stockpiles of oil which they were ready to release in the event of a serious interruption in supplies.

However, the uncertainty over the conflict in Iraq and the loss of Venezuela's exports have left their mark.

UK benchmark Brent crude oil prices averaged $31.47 a barrel during the first quarter of this year, $5 more than the fourth quarter of 2002 and $10 more than a year ago, according to BP's latest trading statement.

The jump in the price of WTI, the US benchmark crude, was even more dramatic. It averaged $34 a barrel, from $28.31 at the end of 2002 and more than $12 above prices a year ago.