NewsStand - Friday, May 02, 2003 <a href=www.menafn.com>MENAFN-Agence France-Presse NEW YORK, May 2 (AFP)

NEW YORK, May 2 (AFP) - World oil prices slipped Friday as Venezuelan gasoline arrived in the United States and a tense oil rig stand-off in Nigeria neared resolution, analysts said. New York, light sweet crude June-dated futures contract fell 36 cents to 25. 67 dollars a barrel.

In London, the price of benchmark Brent North Sea crude oil for June delivery fell 24 cents per barrel to 23.58 dollars.

"The weakness of the energy market came from the fact that some gasoline is coming up from Venezuela and is landing in the Gulf (of Mexico)," said Refco market analyst Jim Still.

Weak gasoline priced dragged down prices of crude and heating oil, he said. In addition, the second quarter of the year was traditionally marked by weak demand for energy.

Earlier, prices were beaten down in London by as fears eased that labor unrest in Nigeria's oil fields could spiral out of control.

On Friday, a US oil firm whose Nigerian offshore rigs had been hijacked by striking workers since mid-April, trapping 100 Western employees, said it had reached a deal with unions to end the dispute.

Transocean Inc. said it hoped the process of evacuating people from the four rigs would begin "promptly".

Earlier this year, political and ethnic unrest in the country's oil rich Niger Delta region halted around a third of the country's oil exports, pushing world prices upwards.

The markets were also watching for any more action from the Organisation of Petroleum Exporting Countries (OPEC) following the cartel's somewhat botched attempt to ease prices up, analysts said.

At a meeting in Vienna last week OPEC said that its members would cut two million barrels per day of production from the start of June to absorb a glut in crude on world markets after the Iraq war.

However at the same time it raised official production ceilings to bring them closer into line with reality, leading dealers to conclude that little would really change.

Analysts at brokerage Sucden UK said the market had noted remarks from OPEC Secretary-General Alvaro Silva that while the cartel was waiting to see the results of the production cuts, its "does not mean our hands are tied until then".

"These comments show that it is likely that OPEC feel that they did not cut production enough and that with Iraqi production coming back on line prices could drop," the analysts said in a note.

However even this expectation was not sufficient to shore up prices.

Adding to the downwards momentum was anticipation that Iraq's crude could flow back onto world markets relatively soon.

On Wednesday, US Energy Secretary Spencer Abraham told reporters in Saudi Arabia that Iraq could restore its pre-war oil production levels "within months".

burs-ved/djw/mdl

By <a href=www.nytimes.com>BLOOMBERG NEWS

oyal Dutch/Shell and ChevronTexaco said yesterday that their first-quarter earnings more than doubled, capping a series of strong results for the industry as the price of crude oil rose.

Earlier this week, Exxon Mobil and BP reported sharp gains for the quarter, when crude oil prices climbed to a 12-year high and refining margins widened. Prices have since fallen by a third, signaling lower earnings over the rest of the year.

"This may be a high-water mark for the oil companies," said Timothy R. Ghriskey, who manages $100 million in assets, including an undisclosed number of ChevronTexaco and Exxon Mobil shares, at Ghriskey Capital Management. "Oil prices have already dropped, and you are likely to see second-quarter profits lower."

Shell, the British-Dutch giant, said net income jumped to $5.33 billion from $2.26 billion a year ago.

At ChevronTexaco, the next biggest oil company after Exxon Mobil, profit rose to $1.92 billion from $725 million. Sales climbed 53 percent at Shell and 46 percent at ChevronTexaco.

ChevronTexaco's profit was the highest since the company was formed through Chevron's acquisition of Texaco Inc. in 2001. The company's exploration and production earnings rose 73 percent from a year earlier, to $1.97 billion. Profit from oil refining was $315 million after a $61 million loss a year earlier.

Higher natural gas prices contributed to the profit gains.

In the first quarter, crude oil futures averaged $33.80 a barrel, up 56 percent from a year earlier. Prices have since fallen to about $26, with forces led by the United States taking control of Iraq and oil shipments resuming in Venezuela after a national strike. In addition, Shell and other producers have restarted wells in Nigeria that had been idle because of fighting between government and opposition forces.

May 2, 2003, 10:08PM Houston Chronicle News Services

Royal/Dutch Shell Group and ChevronTexaco said Friday that first-quarter profits more than doubled, capping a week of record oil earnings, because prices surged amid war in Iraq and supply disruptions in Nigeria and Venezuela.

Shell, Europe's largest oil company by market value, said net income jumped to $5.33 billion from $2.26 billion in last year's first quarter. At ChevronTexaco, the No. 2 U.S. oil company, profit rose to $1.92 billion from $725 million. Sales climbed 53 percent at Shell and 46 percent at ChevronTexaco.

The combined first-quarter profits at the two companies and rivals Exxon Mobil and BP tripled to $17.8 billion as crude-oil prices climbed to a 12-year high and refining margins widened. Prices have since fallen by a third, signaling lower earnings to come.

In other earnings:

· UAL, the bankrupt parent of United Airlines, on Friday reported the biggest quarterly shortfall of any major U.S. air carrier as the war in Iraq discouraged travel and raised fuel costs.

The $1.3 billion net loss topped that of rival AMR Corp. parent of American Airlines, which posted a $1 billion first-quarter loss last week and narrowly averted bankruptcy for the third time.

· Cigna said a strong performance from many of its employee benefits programs helped offset health plan membership declines and maintain first-quarter net income above expectations. · Unilever posted a 2 percent rise in first quarter profit, but the maker of Lipton Tea, Hellman's Mayonnaise and Dove soap said it had missed its own sales targets after weaker-than-expected demand in the beginning of 2003.

<a href=www.thescotsman.co.uk>The Scotsman JAMES ASHTON SENIOR CITY CORRESPONDENT ROYAL Dutch/Shell yesterday became the latest oil major to report record profits on the back of soaring oil prices in the run-up to the war in Iraq.

The British-Dutch company reported underlying profits up 96 per cent to US$3.91billion (£2.44 billion) - or £312 every second - in the first quarter of 2003.

The result was above analysts’ expectations and follows a glut of huge profits from its peers.

Earlier this week, BP reported net profits up 136 per cent to $3.73bn (£2.35bn) as oil prices touched 12-year highs. And US firm ChevronTexaco said yesterday that it more than doubled its profits in the same period to $1.92bn (£1.2bn), while its larger peer ExxonMobil tripled its contribution.

Oil prices jumped 48 per cent compared with a year earlier to $31.50 per barrel, boosted by war in Iraq, strikes in Venezuela and civil unrest in Nigeria.

Natural gas prices were also up significantly during the period and refining margins were boosted by a tightening of the global balance between supply and demand.

The shares were up 12.25p, or 3.3 per cent, in London.

Investors have come to expect a forecast-beating figure from the company, but are more concerned about the current outlook. Crude fell this week below $25 per barrel from an average of more than $30 in the quarter, as markets anticipate increased supplies after the war and sluggish demand growth.

Peter Hitchens, an analyst at French stockbroker Cheuvreux, said: "If they hadn’t been at the top of the range that would have been a disappointment.

"The problem is, that’s history, and now the oil price is the issue."

Despite a run of huge profits, Royal Dutch shares have dropped 35 per cent and Shell 21 per cent in the past year - among the largest falls of the world’s top oil stocks - as investors anticipate lower crude prices this year.

Shell bought out Enterprise Oil, the North Sea exploration and production business last year, helping production rise 6 per cent in the quarter to 4.2 million barrels.

But the acquisition has not been enough to dispel ongoing concerns specific to the world’s second-largest oil firm about near-zero underlying output growth, and oil and gas reserves that are running out faster than new finds can be booked.

Underlying growth was flat, in line with recent forecasts from the company for 2003.

Shell officials said that its plan for 4.1 million barrels a day of output this year was on track and reaffirmed a 3 per cent long-term output growth target.

Some of Shell’s production was shut in Nigeria and about 150,000 barrels per day of its West Nigeria Delta joint venture remains closed.

Excluded from the adjusted figure was the impact of a $1.7bn (£1.05bn) gain from the sale of 14.75 per cent stake in German gas distributor Ruhrgas to German utility E.ON.

<a href=www.dailytelegraph.co.uk>dailytelegraph.co.ukBy Malcolm Moore (Filed: 03/05/2003)

Shell became the latest oil company to benefit from the high oil prices caused by the war in Iraq, as it posted record results for the first three months of the year.

The oil major announced adjusted current cost of supplies earnings of $3.9 billion (£2.5 billion) for the first quarter. The total strips out the $1.3 billion Shell received for its stake in Ruhrgas, and adjusts the figures for the changing value of Shell's inventories.

"This is an exceptional income for us at a very strong oil price environment," a spokesman said. "Obviously that may or may not change. I don't have a crystal ball but what is important for us is how we take our business forward."

The high price of oil, which peaked at over $34 a barrel in London in March, also helped BP earn a record $4.27 billion in the first quarter, while ExxonMobil made a record first quarter net profit of $7.04 billion.

But yesterday, the price of Brent crude for June delivery stood at $23.58. This change in conditions makes it is unlikely for strong results to continue next quarter. As one analyst at Goldman Sachs commented: "Nice results, shame about the outlook." Analysts said that since the price peaked in March, the oil sector has underperformed the market by 11pc.

Shell offset problems with production in Nigeria and Venezuela by reporting not only a large increase in earnings in exploration and production, but also a 118pc improvement in its natural gas earnings and a 139pc rise in its oil products income.