The Dallas Morning News Last Updated: April 24, 2003

The Organization of the Petroleum Exporting Countries surprised oil traders Thursday, deciding at an emergency meeting to cut production but raise quotas to keep oil supplies plentiful.

The 11-member oil cartel, which pumps a third of the world's oil, was expected to trim some production in an effort to stem a postwar slide in oil prices.

The move should offer some relief to motorists this summer, because OPEC didn't cut production to the point that it would push prices above $30 a barrel and lead to higher gasoline prices.

"This is all extremely good long-term news," said Peyton Feltus, president of Randolph Risk Management. "If we continue to see that we're moving closer and closer to stability, pump prices will be more reminiscent of years past."

Thursday's actions could mean a gasoline price decrease of between 5 and 6 cents a gallon at the pump in the United States, according to George Gaspar, who follows the oil market for Robert W. Baird & Co.

Without the OPEC decision to cut production, gas prices might have fallen even more as additional oil came onto the world markets, he said.

In addition to the OPEC cuts, other things have an impact on pump prices, he said. For example, U.S. gasoline inventories now are about 4.6% lower than a year ago, thanks in part to disruption in the Venezuelan oil industry. He also said that pump price patterns will change next month, when the summer driving season begins in the U.S.

The OPEC decision will have the largest effect on Saudi Arabia, the world's largest oil producer, which was among key producers that had opened their spigots to prevent supply shortages from a strike in Venezuela and war with Iraq.

Some of Iraq's oil fields started pumping again this week, but exports aren't likely to resume until June. OPEC is expected to make further cuts as significant Iraqi exports return to the market.

"This is an initial step to throttle back the volumes that were being produced as a result of the conflict and as a result of the heating season," said John Gerdes, an analyst at Southwest Securities.

Though oil prices moved above $30 per barrel last week for the first time since the war started, news of higher imports sent prices down 12% this week.

Gasoline prices had been dropping steadily since the war with Iraq started but threatened to rise with higher crude oil prices as the summer driving season approached.

Many analysts expect oil prices to remain well below $30 per barrel, likely in the low to mid-20s, which could allow gasoline prices to fall further.

Crude oil closed 13 cents higher Thursday, at $26.78 per barrel, on the New York Mercantile Exchange.

OPEC members, which control three-fourths of the world's proven oil reserves, say they want to manage production to keep prices between $22 and $28 a barrel.

Avrum D. Lank of the Journal Sentinel staff contributed to this report.

<a href=www.voanews.com>VOA News 24 Apr 2003, 23:57 UTC

Two dissident Venezuelan army captains implicated in last year's failed coup against President Hugo Chavez are seeking political asylum in the Dominican Republic.

The lawyer representing brothers Ricardo and Alfredo Salazar made the announcement Thursday, saying his clients are staying at the Dominican Republic's embassy in eastern Caracas. An embassy official refused to comment.

The Reuters news agency says the Salazar brothers escorted President Chavez to an island off Venezuela's coast during the April 2002 military coup when he was briefly deposed.

They also joined a group of dissident military officers who declared themselves in rebellion last October and took part in a Caracas plaza protest against the Chavez government.

The two officers are the latest Chavez opponents to seek asylum. In March, Venezuelan labor leader Carlos Ortega went into exile in Costa Rica to avoid prosecution on treason charges for organizing a two-month national strike that failed to oust Mr. Chavez.

President Chavez has sought to bring to trial opposition leaders and former workers from the state-run oil company, Petroleos de Venezuela, who took part in the walkout. The strike was felt most severely in the country's key oil industry.

springfieldnewssun.com-The Associated Press By BRUCE STANLEY AP Business Writer

VIENNA, Austria (AP)--Hoping to stabilize weakening crude prices, OPEC members agreed Thursday to cut their current oil output by 2 million barrels a day, or 7 percent.

At the same time, the Organization of Petroleum Exporting Countries took the surprising step of temporarily raising its official output target to 25.4 million barrels, up 900,000 barrels a day from its existing ceiling.

The changes take effect June 1, OPEC President Abdullah bin Hamad Al-Attiyah said.

The group, whose 11 members pump about a third of the world's oil, announced its decision at a chaotic news conference at its headquarters that left some energy analysts bewildered.

The announcement followed three hours of emergency talks that aimed at preventing a further decline in prices. Crude prices have tumbled from almost $40 a barrel for U.S. crude before the Iraq war to about $25 in recent weeks. OPEC feared more declines if it didn't rein in what it saw as an oversupply just as crude demand reached a seasonal low.

The group based its production cut largely on what it said was sluggish global demand during the second quarter. The slowdown has been exacerbated by the outbreak of severe acute respiratory syndrome, which Al-Attiyah said has dampened crude demand by 300,000 barrels a day.

OPEC plans to review its decision when it meets again June 11 in Doha, Qatar.

We feel we may need another cut in June,'' Al-Attiyah said, adding: We will watch the market very carefully. We will see how the market reacts.''

The market's initial reaction was to shave about a dollar off the price of a barrel of oil, as traders apparently concluded that OPEC was making more crude available than they had expected. June contracts of U.S. light, sweet crude fell as low as $25.61 a barrel in New York, but ended down 1 cent at $26.64 a barrel. North Sea Brent crude for June delivery settled up 4 cents at $24.30 a barrel in London.

Al-Attiyah argued that OPEC could not begin cutting production in May because member countries had already committed fixed quantities of oil to their customers.

``We cannot pull out of the market,'' he said.

Several OPEC members had boosted their production before the war, hoping to head off a supply shortage. The rapid end of the conflict has left them facing what they see as a surplus of 2 million barrels a day.

It is important to reduce oversupply,'' Venezuela's oil minister Rafael Ramirez told reporters before the hastily arranged talks began. We have to have more discipline, and it is important to take measures and remove that amount from the market.''

If not, OPEC wouldn't be able to maintain its price target of $25 a barrel, he said.

Many energy analysts had expected OPEC to agree to curb production. In the end, the group took the unusual decision of slashing its actual production--which it calculated as 27.4 million barrels a day, including Iraq--while also raising the nominal ceiling for OPEC's 10 members excluding Iraq. OPEC's current target is 24.5 million barrels a day.

The decision means Saudi Arabia, OPEC's most powerful member, would reduce its production by 1 million barrels a day, Al-Attiyah said.

OPEC representatives called Thursday's meeting to reassess the group's output levels as oil began flowing again in Iraq for the first time since the war.

OPEC is ready to welcome Iraq back as a participating member, Al-Attiyah said. Iraq hasn't taken part in the group's production agreements since April 1991, after the first Gulf War.

I hope Iraq comes back tomorrow,'' he said, adding later: We will accommodate Iraq at the right time.''

To keep control of oil production, OPEC will eventually need to reintegrate Iraq's future output into the group's overall production. This could be a divisive project that would probably require other members to reduce their own shares of OPEC's output.

Breaking News Posted on Thu, Apr. 24, 2003 TOM COHEN Sun-Herald.com-Associated Press

TORONTO -Canada's largest city staggered Thursday under a health alert warning people to stay away because of the SARS outbreak, leaving shops mostly empty, more conventions canceled and growing fear of long-term economic damage.

The federal government asked the World Health Organization to rescind its call for people to avoid Toronto because of the outbreak of severe acute respiratory syndrome that has killed 16 people, while Ontario province and city officials began planning for the economic impact.

"It is a mystery to us how they came to the conclusion they did," said Dr. Paul Gully of the federal health agency, which appealed to WHO to reverse its decision.

Gully said that seemed unlikely, but he also indicated Canada would tighten airport screening of passengers.

Britain, France, Ireland, Venezuela, Australia and Jamaica already have issued warnings similar to the WHO advisory, and the impact was immediate. But the United States has not taken such steps.

At the downtown Eaton Center, amid gleaming skyscrapers a few blocks from the Lake Ontario waterfront, merchants said business was down, particularly among American tourists who normally fill the shops.

"Usually it's quite busy throughout the day with lots of people milling around looking at things. Today and yesterday, there's nothing," said Charles McLachlan, manager of the Compucenter software store. "The city has basically emptied out."

While no one wears masks on the downtown streets, McLachlan noted a few customers these days want their change placed on the counter instead of in the hand.

"I'm not overly concerned," said Christy Cummings, one of Toronto's more than 3 million residents, who was shopping with her 3-year-old son. "I've been washing my hands more, and my son's, but we're still taking the subways and doing what we normally do."

Since SARS first appeared in Toronto from Asia just over a month ago, the city's 400,000-strong Chinese community - the biggest in North America - has been hardest-hit, with restaurants and shopping malls reporting business down 70 percent.

Now the city's robust convention industry, already hurt with two major medical conferences canceled in recent weeks, is taking more hits.

The Independent Educational Consultants Association of Fairfax, Va., moved its annual meeting of more than 600 people to Orlando, Fla., executive director Mark Sklarow said Thursday.

Planned for five years, it was to have been the group's first meeting outside the United States, and Sklarow said he wasn't sure about getting out of the contract with Toronto's Fairmont Royal York Hotel or the $20,000 in theater tickets purchased.

He called the WHO advisory "ridiculous," but said there was no choice but to cancel because his group had advised its members to rely on WHO and other health authorities on whether to attend.

Canadian Health Minister Anne McLellan spoke Thursday to WHO head Gro Harlem Brundtland about the travel advisory, saying the two agreed to increased discussion among experts about the situation.

Ontario Premier Ernie Eves called for an immediate reversal. The actions of the WHO are wrong and they are irresponsible," Eves said. "The decision is not based on scientific fact."

By including Toronto on the list of SARS hot zones - joining Hong Kong, Beijing, and the Chinese provinces of Guangdong and Shanxi - the WHO fueled a perception that an epidemic exists here.

Canadian experts deny that, noting the 330 probable and suspected cases is far lower than in China and Hong Kong. They also point out that 132 of the estimated 260 suspected cases have been released from hospitals.

They reiterated that their containment strategy of isolating known cases and tracking all possible exposures was working, but the message has failed to resonate.

Jim Flaherty, the Ontario enterprise minister, predicted "serious economic harm in the hotel and convention business," a mainstay of the Toronto economy. "There's concern with respect to the summer season," he said.

The Toronto City Council held an emergency meeting on the situation Thursday, with Mayor Mel Lastman depicting a grim situation.

"The businesses are hurting, they're hurting bad," he said. "People's lives are being adversely affected by both the disease and public perception of this crisis."

He said he would ask banks to allow deferred payments on loans and mortgages, after previously asking businesses to try to keep employees on their payrolls.

"I don't want to see SARS cost anyone their jobs, their homes, or their businesses," Lastman said.

It's too late for some in the tourism industry, said Paul Clifford, president of a local hotel and restaurant union. Hundreds of bell boys, cleaning staff, waiters and others already have been laid off, he said.

David Dodge, governor of the Bank of Canada, predicted the drop in travelers will hurt the national economy, with Toronto accounting for about a fifth of the total economic activity.

While major sports events prior to the WHO warning Wednesday have been well-attended, the Toronto Blue Jays say group sales are down for an upcoming homestand that begins Friday night against the Kansas City Royals.

"We've lost in excess of 5,000, close to 10,000 in group sales," said Paul Godfrey, the club's president and chief executive officer. "And that doesn't count people holding back who have second thoughts. We can tell walkups are down 500 to 1,000 a game."

Major League Baseball officials advised caution when players visit Toronto, telling teams to avoid crowds, hospitals and public transportation. And if they want to sign autographs, they ought to use their own pens, said Dr. Elliot Pellman, the league's medical adviser.

Concerns about the disease also prompted a religious order to tell hundreds of Toronto-area pilgrims to stay away from an annual outdoor Mass scheduled for Sunday. The Marian Fathers had been expecting more than 450 people from around Toronto for its special Mass at the Shrine of Divine Mercy in Massachusetts. The ceremony draws more than 20,000 people.

Any arriving at the Sunday Mass "would be requested to leave," said Marians spokeswoman Kathleen Ervin.

<a href=www.thescotsman.co.uk>The Scottman, Fri 25 Apr 2003 SUSAN BELL IN PARIS

TWO British men have been arrested in Paris on suspicion of running a multi-million-dollar call girl ring that allegedly supplied prostitutes to princes, film stars and captains of industry.

David Mathew Barrett, 33, and Ramsay Attallah, 38, are being questioned by French police following a two-year undercover investigation by the Paris vice squad, which led to their arrest on 21 March.

The pair are accused of supplying prostitutes to the jet set, allegedly charging their rich and often famous clients 1,000 (£670) an hour. They are also being investigated over allegations of supplying prostitutes to a member of the Saudi Royal family who allegedly paid nearly 2 million for three months of loyal service.

If convicted of "aggravated procuring", Barrett and Attallah could face up to 20 years in prison.

Ten others have been arrested in connection with the case, including a French chauffeur, two escort boys, two Brazilian transvestites and five alleged call girls, including a former Miss South America and four Brazilians.

Police confirmed to The Scotsman that the two Britons had been arrested and were being questioned in relation to the allegations.

Shortly before their arrest, an exotic troupe had returned from two months in Dubai, allegedly as guests of a member of the Saudi Royal family.

According to the popular weekly news magazine VSD, the Saudi prince, who has not been named, paid 1.9 million for three months of attention. Some 40 members of the call girl ring from Poland, Switzerland, the Czech Republic, the United States, Venezuela and Brazil allegedly travelled to Dubai at the end of January and were installed in a royal palace.

The group included several models as well as male prostitutes and transvestites. Members of the ring were paid 27,600 each, the magazine said, as well as receiving presents including watches and jewellery from the Saudi royal.

The group returned to Paris via Beirut the day hostilities broke out in the region, some of them travelling first class, VSD reported. Upon their return to Paris, the group took up residence in an elegant block opposite the flat where Barrett and Attallah lived.

The prostitutes said they were under constant surveillance and were forbidden from making telephone calls.

The two men were arrested at the luxury flat they shared on the wealthy Avenue Marceau in the well-to-do eighth arrondissement.

Among the items seized from the flat were lists of names of men and women complete with medical reports certifying the absence of sexually transmitted diseases, several thousand euros in cash, mobile phones, CD-ROMS, airline tickets, photocopies of passports and a lap-top computer.

Investigators say it is too early to put a figure on the fortune amassed, but say they have already found nearly 350,000 in cash stashed in hotel and bank safes.

Lawyers for the two men say their clients are innocent. Barrett reportedly told investigators he had only introduced people and had forced nobody to have sex.

Alain Fraitag, lawyer for Attallah, said his client was simply "a friend" of Mr Barrett and had played no part in the affair.