<a href=www.sun-sentinel.com>sun-sentinel.com By Michael Turnbell Transportation Writer Posted May 9 2003

Retail gasoline prices continued their skid downward this week, but for most drivers, the ride is almost over. Prices have dipped 17 cents per gallon on average over the past seven weeks as crude oil prices continue to tumble in the wake of the Iraq war.

But the price at the pump is still a few cents higher than a year ago and is expected to stay that way throughout the summer.

"With all we've been through in the last few months, that's still not that bad," said Yoli Buss, AAA's traffic safety director. "It's better than we might have expected."

In March, gas prices reached their highest levels ever in Florida and many places around the country.

According to AAA's daily fuel gauge report, the per-gallon average in Fort Lauderdale on Thursday was $1.54. A month ago, that average was substantially higher, $1.71. But a year ago, motorists paid $1.50.

Miami's price is $1.55, vs. $1.70 a month ago and $1.52 a year ago.

In West Palm Beach-Boca Raton, the regular unleaded average posted Thursday was $1.61, better than the average a month ago of $1.74. A year ago, motorists paid $1.55.

For Brenda Wilson, the drop in prices made it possible for her to drive from her Georgia home to visit family in Delray Beach. "Two months ago, I don't think I would've made the same trip," said Wilson, 42, as she filled up her Nissan Pathfinder at a Hess station on Federal Highway at Glades Road in Boca Raton.

Expect gas prices to be on the rise again as the summer driving season swings into high gear on Memorial Day. But the price increases won't be as high as predicted a month ago, thanks to lower crude oil costs, the U.S. Energy Department's Energy Information Administration said Thursday.

"A lot of people are going to be traveling by car," AAA's Buss said. "There are a lot of great air and cruise deals out there to get people traveling again. But there are a lot less flights. So even though there are these great deals, if you don't book your trip way in advance, you're going to miss out."

The war's conclusion certainly helped lower gas prices. The price of crude has dropped dramatically, from almost $40 a barrel prior to the war to less than $30 today.

"Crude oil prices had several dollars extra per barrel built in prior to the war in Iraq because Iraq had threatened to destroy its own oil resources, and that was prevented," said California-based analyst Trilby Lundberg, editor of a national survey of gas stations. "The response of the oil market was a price crash."

Another factor contributing to the price declines is Venezuela's continuing recovery from its oil industry strike, Lundberg said. She said Venezuela is back up to, or close to, its pre-strike production level of 3.2 million barrels per day.

The downward gas price trend isn't expected to continue.

Analysts say consumers didn't buy less fuel when prices soared in March and probably won't slow down when prices inch back up this summer. U.S. gasoline demand is expected to reach a record 386 million gallons a day during the summer, up 1.6 percent from last summer, according to the Energy Information Administration.

In February, Florida Attorney General Charlie Crist asked the Federal Trade Commission to investigate whether Florida's gas stations were improperly increasing prices to take advantage of fears of a war with Iraq. He also asked representatives of major oil companies whether they were withholding oil from the market. That inquiry is still unsettled.

The last time Florida investigated high gas prices, in the 1970s, the inquiry took 17 years and there were no substantial findings.

"Our staff has been in regular discussions with people from the gas companies. But no new issues have arisen from that," said Joann Carrin, a spokeswoman for Crist. "We're continuing to gather information."

Information from The Associated Press was used to supplement this report.

Michael Turnbell can be reached at mturnbell@sun-sentinel.com or 954-356-4155.

May. 9, 2003. 01:00 AM JEFFREY JONES <a href=www.thestar.com>Toronto Star-REUTERS NEWS AGENCY

CALGARY—EnCana Corp., North America's biggest oil explorer, says first-quarter profit surged nearly eight-fold due to sky-high oil and gas prices and hefty gains from the sale of pipeline assets.

"Strong growth in sales of conventional oil and natural gas combined with robust commodity prices produced exceptionally strong financial results," EnCana's president and CEO Gwyn Morgan said yesterday.

"With the outlook for a continuation of very strong gas pricing fundamentals, EnCana is extremely well positioned to capitalize on a production mix that is leveraged two-thirds to North American natural gas."

EnCana, created a year ago in the Canadian oil industry's largest merger, has garnered $2.7 billion in proceeds from the sale of pipelines and its stake in the Syncrude Canada oil sands venture, and investors are awaiting details on how the war chest will be used.

The company likely is sizing up acquisitions outside its biggest operating regions in Canada and the U.S. Rockies, Peters & Co. Ltd. analyst Brian Prokop said.

"I think they need to get some international assets, and safe international assets," Prokop said. "There's a lot of stuff coming up in the North Sea and they have a significant project there — that's a safe way to go."

EnCana, which also operates in Ecuador and explores in other regions, has already cut debt to well under one year's worth of cash flow and has bought back some stock.

In the quarter, it earned $1.3 billion, or $2.57 a share, up from a year-earlier $163 million, or 34 cents.

The prior-year figures are presented as if PanCanadian Energy's takeover of Alberta Energy, completed in April, 2002, to create EnCana, took place at the start of that year.

The most recent profit included an after-tax gain of $263 million from the sale of the Express and Cold Lake, Alberta, pipelines and another $193 million gain from the impact of the strong Canadian currency on U.S.-dollar denominated debt.

Excluding the one-time items, earnings were $790 million, or $1.63 a share, beating an average $1.54 a share forecast by analysts polled by Thomson First Call.

Cash flow, a glimpse into an oil company's ability to fund projects, more than doubled to $1.8 billion, or $3.80 a share, from $779 million, or $1.61 a share.

EnCana joined a long list of oil companies that have pumped out huge profits in the quarter after crude prices jumped 55 per cent as markets feared supply disruptions before the U.S.-led war in Iraq and during a protracted strike in Venezuela that crippled exports from the OPEC member.

As one of North America's biggest natural gas producers, EnCana also was buoyed by prices for that commodity, which more than doubled due to a cold winter and depleting inventories.

First-quarter conventional oil and gas sales increased 10 per cent, averaging the equivalent of 735,836 barrels of oil a day.

Of that, natural gas sales rose 11 per cent to more than 3 billion cubic feet a day.

By Timothy Burn THE WASHINGTON TIMES

     Energy Secretary Spencer Abraham said yesterday that the Bush administration's "quiet diplomacy" kept global oil prices from skyrocketing during the war with Iraq.

     "We have emerged from that period in really much more stable and strong condition than other energy crises in the last 30 years," Mr. Abraham said in an interview with editors and reporters at The Washington Times.

     Mr. Abraham was referring to the events of the past six months, a period in which world oil prices were battered by several factors, including the threat of a U.S.-led invasion of Iraq, a nationwide strike in Venezuela that temporarily halted oil exports, a cold winter in the United States and labor unrest in Nigeria.

     Though crude oil prices rose steadily during the three months leading up to the start of fighting in Iraq, peaking at about $38 per barrel in March, prices quickly retreated below $30 as the war began. Crude closed at $26.98 on the New York Mercantile Exchange yesterday.

     "I don't think that happened by accident," Mr. Abraham said. "It happened without having to tap the [Strategic Petroleum Reserve]. It was a success, a triumph for the quiet diplomacy approach we have taken."

     Many of the world's major producers, even those that opposed the Iraq invasion, such as Russia, promised to ensure stable oil supplies during the war. Their goal was to prevent the kind of price volatility that followed other crises in the Middle East, such as the oil embargo by the Organization of the Petroleum Exporting Countries (OPEC) in 1973 that caused world oil prices to quadruple and drag down the U.S. economy.

     According to the Department of Energy, Saudi oil production, which stood at 8.8 million barrels per day in February, rose to 9.6 million barrels per day by last month, when major combat operations in Iraq ended.

     Global oil prices settled in late March once it became clear that the Iraqi military had not sabotaged its oil fields, a possibility that weighed heavily on oil markets because Iraqis had set fire to hundreds of Kuwaiti oil wells during the 1991 Persian Gulf war. Additionally, Venezuela's oil production began increasing in February after the nationwide general strike collapsed.

     The Bush administration, while it has made energy a top priority, has sought to pursue diversifying the nation's foreign sources of oil and boosting world supply through back channels and away from the media, a tactic Mr. Abraham calls "quiet diplomacy."

     By contrast, Clinton administration Energy Secretary Bill Richardson, now the governor of New Mexico, was noted for making highly publicized trips to oil-producing nations to persuade them to boost production and, thereby, hold down world oil prices.

     The Bush administration "has been much more quiet in their pronouncements," said John Felmy, chief economist with the American Petroleum Institute, an industry think tank. "So far, it looks as though the current administration has been much more successful in terms of seeing additional supplies come out."

     Mr. Abraham returned last week from a quick trip to the Middle East, where he visited with oil ministers and other high-ranking officials from Saudi Arabia and Qatar. The goal was to thank the Saudis, the world's leading oil producers, and other OPEC members, for boosting oil production in the weeks leading up to the war.

     Mr. Abraham yesterday also said the Bush administration has not given up on its goal of opening the Arctic National Wildlife Refuge in Alaska to oil drilling. Though ANWR drilling is only part of the administration's nearly $50 billion energy plan, it has caused the most debate and its future is uncertain.

     "It is baffling to me that at a time when we once again face ... crisis in the energy world that we wouldn't want to produce a little bit more here at home," Mr. Abraham said.

     The Senate began debate this week on overhauling the national energy policy. Sen. Pete V. Domenici, New Mexico Republican and chairman of the Senate Energy and Natural Resources Committee, hopes to pass an energy bill this year, after a similar effort failed last year.

     Though the Bush administration is led by two former oilmen, Mr. Bush and Vice President Dick Cheney, a past chairman of oil-services company Halliburton, Mr. Abraham noted that the president's energy priorities go well beyond petroleum. They include the following:      •"Freedom Car," a plan to spend $1.7 billion over five years to encourage the research and development of a hydrogen fuel-cell-powered car and support systems.      •"Future Gen," a 10-year plan to build the world's first totally clean coal gasification power station, which would produce electricity as well as hydrogen, and reduce the release of carbon dioxide, believed to be a source of global warming.      • "Gen Four," a program to develop a new generation of meltdown-proof nuclear reactors.      • Re-authorization of the Price-Anderson Act, which provides government-backed insurance for nuclear power plants.      • Promoting the development of clean-coal technology. Mr. Abraham plans to hold a summit in June with several countries to find ways to use coal in a "benign fashion."