<a href=www.thecarconnection.com>The Car Connection by Joseph Szczesny       4/20/2003.   Gasoline prices continued to drift downward last week on the heels of the capture of Baghdad by U.S. forces, but could reach a plateau for the next few weeks as American forces try to get Iraq's oil back on the market.

The U.S. military has said that Iraqi oil fields around Kirkuk could start shipping oil in four weeks. But the shipments could get tied up in another round of diplomatic wrangling in the United Nations. The Bush administration made it plain last week that it was eager for the Iraq fields to swing back into production to produce revenue need to pay for both relief and rebuilding efforts inside Iraq.

The wrangling over the oil for food program, however, goes right to the heart of the question of who will hold political authority in a post-war, post Saddam Iraq. President Bush and his advisers have been reluctant to offer the U.N. a larger role and a voice in rebuilding the war-torn country but the administration could find it difficult to sell the oil without U.N. approval.

Saudi Arabia, Iraq's southern neighbor, has adopted the position that the U.S. cannot ship the oil without clear authorization from the U.N. because it doesn't have legal title to the petroleum. Without a clarification of the title to the oil, many larger oil companies will probably be reluctant to bid for it, some experts say. Meanwhile, ministers from OPEC are scheduled to meet this week amid complaints from some members, such as Iran and Indonesia, that there is too much oil on the market and production should be cut to prevent any big decline in the price of crude. Before trading halted in New York and London for the Easter holiday weekend, prices actually had started to creep upwards again on concerns about OPEC actions and on the fear that political turmoil will keep parts of Nigeria's production shut down for a while longer.

The International Energy Agency in Paris, the energy watchdog for 26 industrialized nations, has urged OPEC to be cautious in any supply cut. The prices charged for crude are still too high for firms to rebuild low stocks, the IEA. With prices for crude still hovering above $29 per barrel, refiners and wholesaler are reluctant to take delivery of more oil because they fear they would not be able to recover their costs if the price of oil suddenly fell.

Motorist relief

Motorists around the United States, however, are beginning to see some relief from the relatively high prices that prevailed for through March and into early April.

The average price for regular self-serve unleaded gasoline in Southern California is $2.128, down about four cents from record highs set in late March, according to AAA. San Francisco Bay Area motorists were paying an average of $2.14, equal to the March price. Since hitting a record high of $2.18 per gallon on March 21 a similar, slow decline has occurred in nearly all Southern Californian cities, AAA said.

"While average city prices have begun to drop moderately in the region, they are still all above the $2 per gallon mark," said Auto Club spokesperson Carol Thorp. Nationally, prices are down 12 cents since the March AAA survey and are now averaging $1.595 per gallon. Georgia continues the lowest state average at $1.411, down 11.8 cents from last month, AAA reported.

“Over the past couple of weeks imports from Venezuela, Canada and Europe have increased and that has take the edge off of any supply worries. Imports combined with lower wholesale gasoline prices have sent pump prices lower," Thorp noted.  

<a href=quote.bloomberg.com>Bloomberg By Nesa Subrahmaniyan and Wing-Gar Cheng

Singapore, April 21 -- Crude oil fell as much as 1.6 percent in New York on speculation the U.S. will seek an early resumption of Iraqi oil exports, adding to concern about a glut as northern hemisphere weather warms up and cuts demand.

The U.S., which invaded Iraq to topple its leader Saddam Hussein, is seeking an end to United Nations sanctions on the Middle East producer's oil exports to help fund its recovery from the war. The U.S. last week awarded Bechtel Group Inc. a $680 million contract to rebuild roads, bridges and other facilities, the largest part of a $1.1 billion reconstruction project.

Iraq ``needs the money for construction and that is a very, very strong incentive to get it started early,'' said Anthony Nunan, manager of the international petroleum business at Mitsubishi Corp. in Tokyo.

Crude oil for May delivery fell as much as 49 cents to $30.06 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It traded 16 cents lower at $30.39 a barrel at 11:40 a.m. Singapore time.

On Thursday, oil rose $1.37, or 4.7 percent, to $30.55 a barrel, its biggest gain in three weeks, after members of the Organization of Petroleum Exporting Countries said the group should cut output at a meeting scheduled for Thursday, to accommodate any resumption in Iraqi shipments. The exchange was closed Friday for the Easter holiday.

The U.S. will ask the UN to lift its sanctions on Iraq in phases, keeping supervision of oil sales as it gradually transfers other parts of the country's economy to a new interim authority, the New York Times reported on Saturday. The step-by-step approach is designed to avoid confrontation with France and Russia, which opposed the U.S.-led invasion of Iraq.

Northern Fields

Iraq will be able to start pumping oil from its northern fields in weeks because of limited damage to installations, the U.S. military has said. U.S. Army engineers believe that storage tanks in the area around Kirkuk as well as the region's main export terminal in Turkey are full, the Wall Street Journal said.

The U.S. still has obstacles to overcome before it persuades the UN to endorse any resumption of Iraqi oil exports. On Friday, Russia said the UN should verify that Iraq is free of weapons of mass destruction before it cancels sanctions against the country, rather than ``automatically'' lifting them.

UN sanctions on Iraq should be lifted only by the UN Security Council under conditions set by UN resolutions, Russian Foreign Minister Igor Ivanov said in a statement.

The only big problem is the battle between the UN and the U.S.,'' Mitsubishi's Nunan said. Who has the authority to sell? The U.S. doesn't want to cede its authority to the UN, and that's the big problem.''

Iraq Exports

Oil exports from Iraq, OPEC's third-largest producer in February, have been suspended since March 20 when the U.S. and U.K. invaded the country to remove the regime of Saddam Hussein.

``Iraq may export 1.5 million barrels a day of crude oil to start off and then rising to 2 million barrels within the next three months,'' said Hiromune Fujisawa, oil futures trader at Nihon Unicom Corp. in Tokyo.

OPEC, which pumps a third of the world's oil, lowered its forecast for global demand because of SARS, or severe acute respiratory syndrome. In a monthly report released on Friday it reduced its projection for worldwide consumption of oil to 77.35 million barrels a day, 80,000 barrels down from its forecast last month.

The outbreak of SARS is reducing travel and tourism and is feared to undermine economic growth in the affected regions,'' OPEC said. In addition, the war in Iraq has had an adverse effect on air travel. The resulting decline in aviation fuel consumption is expected to continue through the second quarter of 2003.''

OPEC Output

OPEC output rose to a 1 1/2-year high in March as members made up for disruptions caused by the U.S.-led invasion of Iraq. OPEC's benchmark oil price index has dropped 12 percent during the past month, to $26.25 on Thursday.

A successful accord to reduce output could have the desired effect of preventing OPEC's benchmark price from falling below the group's target of $22 to $28 a barrel, traders said.

``Traders expect prices to rise once there is less oil in the market after OPEC cut output,'' Nihon's Fujisawa said.

Iran, Algeria, Qatar and Indonesia have all called for a cut in OPEC output. Venezuela estimates overproduction at about 2 million barrels a day and may need to reduce production by 11 percent, said Luis Vierma, deputy minister at the Oil Ministry, quoted by Venpres news agency on its Web site. Last Updated: April 21, 2003 00:02 EDT

<a href=www.nytimes.com>The New York Times April 21, 2003 By NEELA BANERJEE

When the Organization of the Petroleum Exporting Countries met five weeks ago to set its spring export levels, it faced an uncertain world, one clouded by the prospect of a war in Iraq. When it meets again on Thursday, it will face more uncertainty now that the main fighting is over.

Before the war, most of OPEC's members pumped oil at maximum levels to make up for an expected curb in Iraqi exports — something that in fact occurred — and prices moved higher. They had climbed through the winter, not only in expectation of war but also because of political strife in Venezuela and ethnic clashes in Nigeria, and then swung back and forth on news from the battlefronts in Iraq.

On Thursday, the last trading day before the Easter holidays, the price of crude oil rose $1.37, or 4.7 percent, to $30.55 a barrel on the New York Mercantile Exchange.

Still, OPEC worries that if it does not scale back its extra production soon, oil prices will fall below $20 a barrel, beneath the group's ideal price range of $22 to $28.

Despite the currently robust prices, OPEC is concerned in large part because of a belief among oil traders, shaped by optimistic forecasts by the United States government, that Iraqi exports could resume in weeks. Combined with the additional OPEC production, this reasoning goes, that could create a glut.

Yet most oil experts agree that it is too early to tell when Iraqi exports might return and at what quantities, given the tangle of technical, financial and diplomatic issues that must be sorted out by the American authorities now running Iraq. It is not even clear who might represent Iraq, an OPEC member, at this week's meeting in Vienna or whether it will even remain in OPEC, a seemingly distant issue that already concerns other members.

Add to the mix the weak global economic recovery and the economic effects of the respiratory illness SARS, industry experts say, and it becomes difficult for OPEC to make a sound decision about how much oil to pump.

"It's very hard now to look at the supply-demand balance," said Mehdi Varzi, president of Varzi Energy, a consulting firm in London. "The picture is so mixed up with what's happening in the Middle East still."

Representatives from the Army Corps of Engineers responsible for repairing oil fields in Iraq have said that some oil exports could start flowing again in weeks. Kurdish leaders who entered the northern oil region near Kirkuk with American soldiers have predicted the same.

But it remains unclear who has the right to export Iraqi oil. Under United Nations sanctions, Iraq can export its oil only through the oil-for-food program, and the Bush administration is pressing the Security Council to change that agreement so the United States can sell Iraqi oil. When this might happen is unclear.

Also, some Kirkuk fields have been so efficiently ransacked that managers there say it may be several months before they can produce enough oil for export. And it remains unclear who will pay to replace what was looted from Kirkuk to make that possible.

Some OPEC leaders, like Algeria's oil minister, Chakib Khelil, say the group will most likely rein in extra production to the official quota levels of 24.5 million barrels a day. It is now producing nearly 26 million barrels, according to recent estimates by the Middle East Economic Survey. And Venezuela and Nigeria have resumed degrees of production.

Such a cutback might be enough to calm a market in which many oil traders and buyers think demand will be slack because of the sluggish world economy. In addition, the SARS outbreak has already slowed economic growth in Asia and led to a drop in demand for jet fuel by several hundred thousand barrels a day because of a decline in tourism, said Lawrence J. Goldstein, president of the Petroleum Industry Research Foundation in New York.

Mr. Goldstein warns that there could be perils to a decision by OPEC to reduce output below 24.5 million barrels a day. Inventories of crude oil and gasoline were very low coming into the spring, and they are being replenished rapidly now by the increased OPEC output. But if that process stops, oil and gasoline prices may again rise as the United States, the largest oil consumer by far, enters the summer driving season.

Who will speak for Iraq on Thursday, and try to answer the unanswered questions, remains a mystery. There is no Iraqi government and the United States has yet to announce the structure of an interim oil ministry. Already, some OPEC members and many people in the Middle East worry that under American influence, Iraq could soon leave OPEC to pump a lot of oil on its own.

But Mr. Goldstein contends that Iraq can do that and stay in OPEC. While its oil output was determined by United Nations sanctions, the rest of OPEC took its market share, produced oil in its stead and pocketed the extra revenue.

Now, Mr. Goldstein and others say, Iraq might tell OPEC that it will pump as much as it can to make up for those lost years of revenue. Before the war, it produced about 2.8 million barrels a day and exported, legally and otherwise, about two million barrels of that.

"Iraq will produce what it's capable of producing," he said, "whether it stays in OPEC or not."

News Interactive From correspondents in Caracas, Venezuela 21apr03

POLICE in Venezuela have reportedly arrested one of 14 military officers who publicly opposed President Hugo Chavez last year. Army Colonel John Giussepe Piglieri was arrested in a shopping centre in the city of Maracay, north-east of Caracas, his sister-in-law said.

Nardick de Diaz told the Globovision network he was transferred to an army base in the city.

The colonel was one of 14 officers that declared themselves "in rebellion" against the Chavez government in October, and was among officers who camped at the Plaza Altamira, a centre of opposition activity during a lengthy general strike that attempted to oust Chavez.

The only other officer arrested for his open opposition to Chavez, a general with the militarised National Guard police, Luis Alfonso Martnez, has been under house arrest since December 30.

Piglieri faces charges of rebellion and dereliction of duty for abandoning his command.

<a href=www.nytimes.com>The New York Times April 21, 2003 By JUAN FORERO

CARACAS, Venezuela, April 20 — Within hours of his death on April 11, 2002, Jorge Tortoza became a martyr for the opponents of President Hugo Chávez. So did many of the other 18 people killed after gunfire erupted here during a sprawling antigovernment march, a confused explosion of violence that led to the brief unseating of the president.

A year later, however, Mr. Tortoza's relatives say they still do not know who is responsible for his shooting. Families of most of the other victims express similar frustration, despite aggressive efforts by both the government and the opposition to cast blame on the other.

"If it is the government, or the other side — I can't say," William Tortoza, 35, a veteran police officer and Jorge's younger brother, said as he pointed out the street corner where his brother fell. "Sincerely, nothing has been done to investigate."

By most accounts, the investigation into the events, the worst political violence in Venezuela in a decade, is indeed in a shambles. Homicide charges against six suspects have been dropped. Other suspects have fled the country. No one has been jailed.

In the aftermath of the shooting, the opposition immediately claimed that the government had fired on the hundreds of thousands of protesters who marched on the Miraflores Palace, the offices of Mr. Chávez. His allies claimed that the deaths were a central part of a carefully orchestrated coup by his enemies.

Though the investigation languishes, it is increasingly clear that the gunfire came from both sides. Investigators and human rights groups say the National Guard troops loyal to the government fired, as did Metropolitan Police officers opposed to Mr. Chávez. Various other gunmen — some have been identified in videos, others are still unknown — also fired shots, say witnesses, investigators and political analysts.

The victims, it is now certain, also came from both sides, with the opposition and the government each losing seven supporters, though both camps continue to claim more victims. Five others were not members of either camp, including Mr. Tortoza, a 47-year-old newspaper photographer whose specialty was crime scenes.

Human rights groups and political analysts place much of the blame for a lack of progress in bringing those responsible to justice with the office of the attorney general, Isaías Rodríguez, who was once the vice president. His ties to the president have compromised his independence, they say.

Ana María Sanjuán, director of the Center for Peace and Human Rights at the Central University of Venezuela, said both sides had manipulated the investigation. Ms. Sanjuán, who is working with 48 human rights groups to press for an impartial investigation, said she had come to the conclusion that neither side wanted to see a resolution.

"Both political sectors have used April 11 in a completely unacceptable way for political ends," she said. "Both sides have tried to say, `I have more of my dead here and I'm most affected.' This has helped shelter those responsible and hindered the investigation."

Mr. Rodríguez, the attorney general, acknowledged that the investigation had been hampered, with crime scene evidence lost and witnesses avoiding investigators. But he blamed the problems on those with "political positions" and independent investigators hired by some families.

His office says that 18 gunmen have been identified, among them 8 police officers, 5 National Guard troops, and 6 progovernment militants firing from the Llaguno Bridge just two blocks from the presidential palace.

In seven cases, investigators can match the victim to a shooting suspect, he said in an interview. He said there were also seven gunmen who may have fired from a downtown building, though they are now believed to have fled the country.

Yet no suspect faces serious charges. Homicide charges against four suspected progovernment gunmen who fired from the bridge, including a city councilman, have been dropped at the court's behest for lack of evidence.

"Those are promising statements by the attorney general, but they're just statements," said Eric Olson, who oversees Amnesty International operations in the Americas. "It's high time that the information be turned into prosecution. Probably they are investigating some, but I think until there's actual justice for the victims and their relatives it's insufficient."

To people like Mohamad Merhi, 51, the deaths and the investigation are a travesty.

David Rochkind/Polaris for The New York Times
The investigation into the killing of 18 people, including Mohamad Merhi's son, during an antigovernment march in Venezuela last year is in a shambles.

His son, Jesús Capote, 18, was marching with opposition protesters when a bullet struck his head and killed him. Now, Mr. Merhi is the most visible advocate for opposition families who lost relatives in the shootings.

Deeply distrustful of the attorney general, Mr. Merhi has instead counted on a group of retired police officers who are allied with the opposition movement to investigate the deaths.

"I know the truth," Mr. Merhi said, insisting that his son was killed by a progovernment gunman. "I am looking for justice. I know there was an ambush, and I know Chávez gunmen were shooting at our people."

The opposition has played to such anger. In the carefully choreographed rallies, like one on the anniversary of the deaths, images of dying protesters are shown on big-screen televisions to the accompaniment of somber music played over huge loudspeakers.

The government, too, has used the deaths, as a symbol of opposition treachery. It has helped organize a group for the families of victims, Association of Victims, which has an office in a downtown building.

Inside, posters of Che Guevara, the revolutionary icon, hang side by side with the Venezuelan flag and advertisements celebrating Mr. Chávez's revolution. Government supporters wounded in the shootings, as well as the relatives of people killed, meet here daily to discuss the cases.

"We are working to make sure that everything is cleared up," said Silenia Morena, 38, whose husband, César Matías Ochoa, was killed. "The dead were not just in the opposition. Yes, they had some. But the majority were from the government side."

But the bitterness extends to those on both sides, including Jorge Tortoza's relatives. Using his connections in law enforcement, William Tortoza said he had badgered investigators and judicial officials, but had come up with few answers.

"I am tired of going and asking questions and looking for answers," he said.

Meanwhile, the family has tried to keep Jorge Tortoza's memory alive. His mother, Rosa Tortoza, 71, visits his grave each week, laying flowers, gently crying and controlling the rage she said has consumed her since his death.

"I would like to clear this up because I want peace of mind," she said softly as she visited the grave on a recent day. "My son was beautiful, and he left behind a beautiful 3-year-old daughter. He was a father and brother and son to all of us."