Industry group IEA says major consumers are more comfortably supplied than previously thought.

June 13, 2003: 1:56 PM EDT

NEW YORK (CNN/Money - Reuters) - Oil prices fell more than 5 percent Friday after the International Energy Agency said major consumers were more comfortably supplied than it previously thought.

U.S. light crude for August delivery was down $1.15 at $29.15 a barrel Friday afternoon, after trading as low as $28.75, extending sharp losses on Thursday and pulling prices away from recent 12-week highs above $32.

London Brent crude for August delivery fell 97 cents to $26.25 a barrel, after trading as low as $26.03 Friday.

Prices fell as the Paris-based IEA, energy adviser to 26 industrialized nations, said it had undershot by 79 million barrels in its previous estimate of oil stock levels.

The agency's revised estimate put oil stocks in the industrialized world at 2.439 billion barrels at the end of April.

"Stocks are still below normal and can absorb some surplus in the third quarter, but I think we have entered a stage when more supply is coming on the market and will impact prices," said Geoff Pyne, oil market consultant to Sempra Energy Trading.

The IEA said the revision did not change its view that global markets were tight. Stocks are still 157 million barrels, or 6.5 percent, below 2002.

"The market is obviously better supplied than we thought as little as two weeks ago, but stocks are still low and fundamentals are still tight, so we need to build more stocks," said Klaus Rehaag, editor of the IEA monthly oil market report.

"The increase in crude stocks may, however, signal some relief for an otherwise tighter heating oil situation later this year," he added.

Oil stocks have been drawn down this year by a harsh northern winter and supply disruptions from a strike in Venezuela, ethnic strife in Nigeria and the war in Iraq.

Iraq on Thursday sold its first oil since the U.S.-led invasion nearly three months ago, but looting and sabotage at oil facilities are expected to keep Iraq's exports well below prewar levels for several months.

The delays in Iraq's postwar export resumption enabled the OPEC producer cartel, which set a $22-$28 target range for its basket of crude oil, to postpone fresh supply cuts at Wednesday's meeting in Qatar.  

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Friday, June 13, 2003 By: Kay Onefeather

Date: Thu, 12 Jun 2003 19:45:47 EDT From: Kay Onefeather Kaonefeather@aol.com To: Editor@VHeadline.com  Subject: Marta Altoaguirre

Dear Editor: Inter American Human Rights Commission (IAHRC) president, Marta Altoaguirre has placed Venezuela in the same league with Colombia, Haiti and Cuba as countries where greatest human rights violations take place.

Senora (?): It seems so much easier to point fingers and accuse a sitting President of violating Human Rights, than it is to point fingers and place blame squarely on the shoulders of those actually guilty of human wrongs.

Those who are guilty ... they who have had free reign regarding human rights abuse over decades, without so much as a whimper from any human rights organizations.

Polarization is hardly NEW to Venezuela! (Where have you been?). It has been around for centuries, separating those that HAD, and those that HAD NO CHANCE!

Yet, over those centuries, who cried abuse, as the majority of people struggled in poverty, hunger and untreated illness/disease?

Perhaps, you prefer more recent times, say the last 50 years?

Or ... maybe the last 20 years?

Again, I ask ...Where have you been?

It seems only now that Human Rights warrant attention in Venezuela ... can one surmise that your attention is yet another feeble attempt to discredit the President?

Of the countries you mentioned, Venezuela is different in that human rights abuses are being addressed ... and changes are being implemented ... and, if President Chavez Frias wasn't constantly called to task for wrongs not of his doing, progress would be even speedier!

Kay Onefeather kaonefeather@aol.com

Fri June 13, 2003 08:08 AM ET By Tom Ashby

LONDON (<a href=reuters.com>Reuters) - The West's energy watchdog, the International Energy Agency (IEA), made on Friday an unprecedented 79-million-barrel upwards revision to its oil inventory data for the industrialized world in March.

The healthier supply picture knocked world oil prices lower, and analysts said the appearance of such a large volume of oil backed up OPEC concerns of oversupply in the third quarter.

The IEA said the timing of the revision was unfortunate, given that the world oil market was seeking direction after the U.S.-led war on Iraq, but that it did not change its view that global markets were tight, especially for gasoline.

"The market is obviously better supplied than we thought as little as two weeks ago, but stocks are still low and fundamentals are still tight, so we need to build more stocks," said Klaus Rehaag, editor of the IEA monthly oil market report.

Benchmark Brent crude oil fell 41 cents to $27.42 per barrel, while U.S. crude futures lost 47 cents at $31.04.

Geoff Pyne, oil market consultant to Sempra Energy Trading, said the revision showed that the OPEC exporting cartel, which stayed its hand on output cuts earlier this week, was right to be concerned by surplus supply.

"All the signs from OPEC were that they knew that U.S. oil prices should not be at $31 a barrel. I thoroughly agree," Pyne said. "Stocks are still below normal and can absorb some surplus in the third quarter, but I think we have entered a stage when more supply is coming on the market and will impact prices."

STOCKS ROSE IN APRIL

After the revision, the IEA said inventories fell at a rate of 570,000 barrels per day (bpd) on average in the first three months of the year. Stocks switched to a rising trend in April, building by an average 720,000 bpd in that month.

The agency said industry stocks in the industrialized world at the end of April at 2.439 billion barrels were still 157 million barrels below the previous year.

OPEC crude output in May rose by 220,000 bpd in May to 26.4 million bpd, the IEA said, due to a recovery in Venezuela and Nigeria where production was crippled earlier this year by strikes and ethnic clashes. Iraqi output was also rising.

OPEC ministers at this week's meeting in Qatar agreed to leave their output ceiling of 25.4 million bpd unchanged, though the group had earlier contemplated a cut to accommodate rising Iraqi volumes.

OPEC signaled instead that it could cut supplies when it meets again in Vienna on July 31.

The IEA forecast for oil demand growth this year was unchanged at 1.0 million bpd, the strongest rate for four years, taking average demand for the 12-month period to 77.9 million bpd.

The agency revised downwards its estimate for demand in the second quarter, but raised forecast demand for the second half of the year.

"Fuel substitution into oil will remain a key driver of demand growth in the third quarter, spurred by extended nuclear power plant shutdowns in Japan and sustained high natural gas prices in the U.S.," the IEA said.

<a href=www.vheadline.com>Venezuela's Elecronic News Posted: Friday, June 13, 2003 By: Chris Herz

Date: Thu, 12 Jun 2003 19:19:36 -0400 From: Chris Herz lildemocracy@earthlink.net To: Editor@VHeadline.com Subject: Iraqi Oil Sales

Dear Editor: This month, the US vice-regal authority in Iraq will begin sales in the open market of crude and refined petroleum products from their new colony.

The obvious policy will be to hold prices low, so as to be the better able to destabilize Venezuela and other OPEC countries -- ultimately to allow US interests to overthrow their governments and confiscate their oil. All the better to enable and establish the new Bush policy of global hegemony through control of oil.

At the same time, the US satrapy in Colombia is seeking to push fighting, and social instability up to and over the border into your country.

The people of Venezuela and other countries had better expect a prolonged period of assault by both economic and military means. From the perspective of Washington, where I work, it is clear enough what is happening -- no more and no less than what Messrs Wolfowitz, Cheney and Rumsfeld have always openly advocated in their voluminous writings ... see their Project for a New American Century.

My advice, and that of other honest North Americans, will be to avoid casting blame for serious economic and security problems on your own (Venezuelan) government ... but rather look to the origins of the problems, right here in the US capital.

In the last US election, 87% of the male Anglo vote, and 63% of their sisters, went to Bush ... these people know where the cheap fuel for all those sport utility vehicles is going to come from. And with a $550 billion foreign exchange deficit, they're not interested in paying a fair market price for this commodity ... nor will they tolerate paying in any currency but all the dollars they can print.

Like it or not ... Venezuela is now exposed on the front line of the struggle for American Empire.

Chris Herz lildemocracy@earthlink.net

<a href=www.fayettevillenc.com>Fayetteville Online Published on: 2003-06-13 By Al Greenwood Staff writer

Summer drivers will probably pay more money at the pump this travel season because oil prices continue to increase.

The average price of a barrel of oil reached $30.72 on June 2, according to the Energy Information Administration. On Thursday, the price closed at $31.73. Before June, the last time the price of oil was above $30 per barrel was April 21, when it reached $30.76.

In Fayetteville, the average price of a gallon of gasoline was $1.39 on Thursday, according to AAA Carolinas. That's lower than $1.42, the average price for last month. But Thursday's figure is still 6 cents higher than last year's average.

On average, gasoline prices take two to five weeks to follow the trend of oil prices, said Ron Planting, an economist at the American Petroleum Institute, a trade group in Washington.

Chet Sechrest said he already has noticed the increase. He was filling up his 1991 Jeep Cherokee on Thursday at the Family Fare station at 2036 Gillespie St. A gallon of regular unleaded gasoline was selling for $1.419.

"There is no reason for an increase in gas prices," he said.

International market

World events would seem to support his claim. The strikes in oil-rich Venezuela have ended. Drilling has started in Azerbaijan, an oil-exporting country between Russia and Turkey. Oil production has resumed in Iraq.

Yet Sechrest is paying more for gasoline than last week, he said.

In the Southeast, the average price of a regular gallon of gas has risen from $1.570 on June 2 to $1.586 on Monday, according to the Energy Information Administration.

"I was hoping it would go down, to tell you the truth, but I don't like the increase," said Dennis Williams of Fayetteville. He was filling up his company truck at the Quick Stop at 1302 Robeson St. A gallon of regular unleaded gasoline was $1.419.

Williams owns D&D Refinishing, a company that restores furniture. His business requires a lot of driving, Williams said. To lower his travel expenses, he said, he tries to group appointments in the same region.

Gasoline prices typically increase during the summer because more people are driving, said Michael Walden, an economics professor at N.C. State University.

Prices also have increased because forecasters overestimated the amount of oil that Iraq would be exporting after the war.

If oil prices remain at $30 a barrel, it will not slow down the economy, Walden said. But it will slow down Sechrest.

He said he is riding his bike more often to save money.

Staff writer Al Greenwood can be reached greenwooda@fayettevillenc.com or at 486-3567.