channelnewsasia.com First created: 14 April 2003 1945 hrs (SST) 1145 hrs (GMT) Last modified: 15 April 2003 0557 hrs (SST) 2157 hrs (GMT) By Dawn Teo

Oil prices have dropped about 30 percent since the start of the war in Iraq, sparking concerns that a possible oversupply could cause prices to crash soon.

But analysts believe the Organization of Petroleum Exporting Countries (OPEC) can contain the fall.Advertisement They are banking on signs the oil cartel will decide to cut production when they meet later this month or in early May.

Crude prices continued sliding on Monday, down 1 percent in Asian trade, on prospects that Iraqi oil could start flowing in coming weeks.

The US is keen to see Iraqi oil pumping as soon as possible to help fund the country's reconstruction.

But that means trouble for other OPEC members, which have been bumping up supplies to counter disruptions from Iraq and other producers.

Ong Teng Tong, Senior Energy Consultant, Itochu Petroleum, said, "Even if they cut, we still think the oil prices may still go down because right now, Nigeria is probably back to normal production and Venezuela, there was a big strike about 2 months ago. They are practically back to normal."

There are problems on the demand side as well.

As winter draws to a close in the second quarter, demand for heating and therefore crude oil tends to fall.

What is worse, many airlines have slashed their routes due to the spread of the Severe Acute Respiratory Syndrome virus, so they are buying less fuel as well.

Still, many analysts predict oil prices will stabilise at between US$24 and US$26 a barrel.

That is roughly the mid-point of OPEC's own target range, which members like Indonesia and Algeria say, is achievable.

War in Iraq - Channelnewsasia.com's special coverage

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Monday, April 14, 2003 By: David Coleman

Operation Holy Week 2003 has got off to a good start in Aragua State with 736 law enforcement officers patrolling beaches along the Caribbean coast where an estimated 255,000 day-trippers are expected during the Holy Week period.

The main concentration of tourists is expected at Ocumare La Costa (195,000 capacity) and Choroni (60,000) where local Civil Defense executive Felix Perez says that a bathing ban has been imposed by the Ministry of Environment & Natural Resources (MARN) at the mouth of the Ocumare and on the El Playon and La Jaivita.

Aragua Fire Chief Mauricio Sanchez says that 300 emergency servicemen and women are deployed at key points along the coast as well as in Colonia Tovar, Camatagua and Villa de Cura where a religious procession is set to take place.

National Guard (GN) commander Edy Ramirez Moyeda says four control points have been set up in El Limon, Choroni and the resorts at Turmero and Villa de Cura while special attention is being given to traffic the Center-West Highway from Caracas to Valencia in an effort to reduce road accidents caused by drink-driving.

Out and about in Caracas tells us everything we should know about Venezuela's nightlife and youth culture

Crude prices drop as significant output from Iraq's largest oil field seen within weeks.

money.cnn.comApril 14, 2003: 6:53 AM EDT

SINGAPORE (Reuters) - Oil prices opened the week one percent lower Monday, as the prospect of a return of Iraqi crude exports to the world market outweighed possible supply cuts by OPEC to avert a potential price slide.

U.S. light crude for June delivery fell 37 cents to $27.77 a barrel, while London's Brent crude for June delivery fell 25 cents to $24.50 a barrel.

Renewed downward pressure on oil prices came after weekend comments by a senior U.S. engineer that Iraq's large Kirkuk oilfields could start pumping within weeks.

The northern fields are capable of producing up to 900,000 barrels per day (bpd) of Iraq's pre-war production of roughly 2.5 million bpd.

"It's a definite possibility that could be just a few weeks away," said Tom Logsdon, a senior member of the U.S. Army Corps of Engineers charged with repairing Iraq's oilfields.

Logsdon said the southern oilfields, where output was up to 2.1 million bpd before the war began March 20, could be up and running in less than three months.

"Depending how quickly workers come on line, we estimate we will have between 330,000 and 1,000,000 bpd being produced within 12 weeks from now," said Logsdon.

Oil prices fell about 10 percent after the start of the war as U.S. and British forces quickly secured a majority of Iraq's oil infrastructure in the south of the country and traders predicted a fairly swift end to hostilities.

But any resumption of crude exports will be up to an interim authority in Baghdad in conjunction with the United Nations, where some analysts forecast that diplomatic wrangling will keep Iraqi barrels off the market for many months to come.

Iraq's crude could hit world markets just as demand is expected to wane by up to two million bpd. The second quarter sees a seasonal slowdown between winter demand for heating and the peak consumption of gasoline during summer vacations.

Compounding the demand downturn, many commercial airlines have slashed routes due to the spread of the flu-like SARS virus around the globe.

At the same time, supplies from OPEC producers are running almost two million bpd above the group's self-imposed ceiling, to counter supply disruptions from Venezuela, Nigeria and Iraq.

The Organization of the Petroleum Exporting Countries is planning an emergency meeting later this month or in early May to discuss tightening compliance to current output quotas or even possible curbs to formal limits.

"We expect that with oil prices heading lower, OPEC will try to be proactive in attempting to keep oil prices at, or above, $25 a barrel," said David Thurtell, commodities strategist at Commonwealth Bank in Sydney.

The International Energy Agency said last week that a big volume of OPEC crude was sitting on the water waiting to hit consumer shores, but warned that it would be imprudent for producers to cut supplies too soon as fuel stockpiles in industrialized nations remain well below normal levels.

Venezuelan President Hugo Chavez said Friday that South America's biggest oil producer was ready to back any proposed OPEC supply cut to support prices in the group's target band of $22 to $28 a barrel for OPEC's reference basket of seven crudes.

OPEC's basket price stood at $25.40 Thursday, compared with a monthly average of $31.54 in February.

"If we have to cut production by one million bpd, or 1.5 million bpd, or 1.8 million bpd, we would be ready to cut," Chavez told a news conference.

An anti-Chavez strike in December and January slashed crude production in Venezuela, usually OPEC's third biggest producer, from 3.1 million bpd to just 40,000 bpd at its low point.

Officials at state oil firm PDVSA said over the weekend that output had recovered to pre-strike levels of about 3.05 million bpd for crude and 150,000 bpd of condensate production.  

<a href=www.heraldtribune.com>The Associated Press-heraldtribune.com

Postwar Spending Boom May Not Materialize BOSTON (AP) - Last fall, the prospect of war took much of the blame for corporate America's unwillingness to spend money, as uncertainty about the effect on oil prices, stock markets and budget deficits crippled the economy. But hope reigned that when the conflict was resolved, companies would commence previously postponed projects, resuming capital spending and lifting the whole economy. Now, many aren't so sure.

Poll Finds Opposition to More Tax Cuts WASHINGTON (AP) - With the country at war and facing budget deficits, six in 10 Americans say this is not the time for more tax cuts, an Associated Press poll finds. Still, half say their taxes are too high. The poll, taken in the days before Tuesday's tax-filing deadline, found that 61 percent say it would be better to hold off on additional tax cuts now to avoid making budget deficits worse and ensure there is adequate money to pay for the war.

Machinists at Lockheed Plant to Strike FORT WORTH, Texas (AP) - Members of the union representing about 4,000 workers at Lockheed Martin Corp.'s Texas aircraft manufacturing plant took to the picket line early Monday, hours after rejecting a contract offer and voting to strike. At 12:01 a.m., as Lockheed Martin Aeronautics' contract with Machinists Local 776 expired, about 20 people began picketing outside the plant. Calls to the union's office were not immediately returned.

Immigrants Make Use of IRS Tax ID Numbers SAN FRANCISCO (AP) - Ernesto Cuellar filed his taxes this year not just to report what he made from his $9-an-hour job as a house painter, but also, he hopes, to speed his path to becoming a legal resident of the United States. Cuellar submitted his federal return using an increasingly popular tax number issued by the Internal Revenue Service to people who can't get Social Security numbers. Many, like Cuellar, are undocumented immigrants, causing concern among critics of U.S. immigration policy.

Restoring Iraq's Economy May Take Years CAIRO, Egypt (AP) - Saddam Hussein took a wealthy, thriving country and drove it into the ground. Restoring Iraq's economy will take years, analysts say, even with the world's second-largest proven oil reserves. The hurdles are formidable: bombed-out roads, bridges, buildings; offices stripped by looters; outdated and corroded facilities in polluted oil fields; fallow farm fields ruined by waterlogging and salinity.

IMF, World Bank to Assess Iraq's Needs WASHINGTON (AP) - Fact finders from the International Monetary Fund and the World Bank will go to Iraq to assess the hugely expensive costs of reconstruction as soon as it is safe to do so. The finance ministers on the policy-setting committees of the IMF and World Bank "made it very clear that this is what they had in mind," World Bank President James Wolfensohn said Sunday, when weekend meetings of the two organizations ended.

World Bank Urges Lower Trade Barriers WASHINGTON (AP) - Global poverty can be cut in half by 2015 if rich countries lower trade barriers and increase foreign aid, the World Bank said Sunday. Poor countries can help themselves by investing more in health and education, the bank said.

Fed Official Sees Moderate Economic Rise PHILADELPHIA (AP) - The U.S. economy will experience moderate growth by year's end, but no sharp postwar rebound, the chairman of the Federal Reserve Bank of Philadelphia predicted Sunday in his annual forecast. Anthony M. Santomero expects the economy to be growing at 3 percent to 4 percent by the end of the year and into 2004 as businesses start to fill depleted inventories and rehire workers.

Venezuelan Oil Output Hits 3.2M Barrels CARACAS, Venezuela (AP) - Venezuela's oil production has risen to its highest level since before a two-month strike crippled operations, the energy minister said Sunday. Rafael Ramirez said Venezuela was pumping 3.2 million barrels a day, up slightly from 3.1 million at the end of March. Venezuela's output quota determined by the OPEC oil cartel is 2.8 million barrels a day.

Gold Prices LONDON (AP) - Gold bullion opened Monday at a bid price of $325.50 a troy ounce, down from $326.60 late Friday.

Japan Markets TOKYO (AP) - Japan's benchmark stock index hit a 20-year low for a second straight session Monday on concern that corporate pension funds were dumping shares. The U.S. dollar was higher against the Japanese yen.

Dollar-Yen TOKYO (AP) - The dollar traded at 120.64 yen on the Tokyo foreign exchange market Monday, up 0.86 yen from late Friday.

Last modified: April 14. 2003 4:38AM

Cambridge Asset Management By Martin & Bart Siegel, CPA, CFP

Second-guessing doesn’t count especially when you have no responsibility for outcomes. This particularly includes retired generals appearing as pundits, offering conflicting views of the unfolding war scenario. Military success is a function of perception, as well as reality. When their actions erode confidence in leadership, they are in essence giving aid to the enemy. This phenomenon also takes place in our economy. When political leaders erode confidence in our economy by making unjustified statements, or thwarting positive action, they are in essence promoting recession, or at the very least delaying our potential recovery.

Again it is the media, stupid. The reporters that are imbedded in the military units have assumed the obligation to report honorably, as accepted members of their units. They aren’t supposed to practice punditry. We are encouraged to believe what they report. This holds true domestically. Their obligation is report the news, not slant it according to their philosophical, or political, desires. If they want to editorialize, it should be labeled as an opinion, not fact. As we approach the next election we will watch the polarization of the media, and politicians. It is difficult to find politicians that believe that there are things more important than their political self-interest. You are even witnessing news networks blatantly splitting along political lines.

A clear example of this is the confusion over drilling in ANWAR. The key to this problem is the 60 votes necessary to prevent a filibuster in the Senate. Isn’t it clear that this has become a national security issue? Without oil from ANWAR, our reliance on Middle Eastern crude according to an energy department agency is to grow from 24% in 2000, to 50% in 2020. Other examples of our oil interdependence is the recent labor strike in Venezuela, which exports 2.5 million barrels per day, as well as the political unrest in Nigeria, which is another major oil exporter. One would think that our Senators would realize that it is crucial that we reduce our dependence on foreign sources of oil. The anti-drilling coalition continues to pull out the same, worn out, protests to drilling. They describe the 2000 acres of permafrost muck on which total darkness descends for 58 days each year, where the temperature drops to 70 degrees below zero, as pristine wilderness. They claim they are worried about the caribou. The caribou actually thrive near the oil fields, where they find some warmth under the pipelines. Then they question the amount of oil that will be derived. They describe it as only a small fraction of US consumption. What they seem tend to leave out is the production of ANWAR could replace10 years of Iraqi production. They also seem to forget that the production of 10 billion barrels of oil will affect the supply/demand function, thus reducing oils overall price.

We at Cambridge have said many times that we recognize our responsibility to remain honest as we report to our readers. We offer opinions, as well as honest data. By providing data, which we used to form our opinions, it allows our readers to interpret the data, and form their own conclusions. The stock market, at any moment in time, is a closed system, with a limited supply of shares outstanding. This offers an opportunity to investors. Each investor synthesizes the information they deem relevant, and comes to their own conclusions. There are only three actions available, that is to buy, hold, or sell. These decisions are made by millions of investors, both large, and small. Those that own stock in an emerging market generally make money. It is that simple. When the tide rises, most boats rise. The number of investors that outsmart the market is extremely small.

It is our considered judgment that we are witnessing a broadening base that is now several months old. We believe that the stage is being set for the next market advance. There are those that do not wish the public to become optimistic about their future. They do not believe it is in their own political self-interest. There are also reporters willing to sacrifice your families well being in order for them to achieve their own career goals. First it was hiding the horrific treatment of the Iraqi people. Then it was the number of body bags that would be coming home. Now that that hasn’t occurred, it is the turmoil, and the cost of rebuilding Iraq. If you go back to World War II did you know that the French killed as many as 50,000 of their own countrymen, in revenge, after the war ended? Lets not even talk about the cost of the rebuilding Europe. Where is the objective journalism? Where are the congratulations for President Bush from the Democrat politicians for a successful mission? Where is the talk of cooperation in jumpstarting our economy? It is a sad situation.

We at Cambridge continue to believe in our leadership. We believe that our Harvard MBA President is up to the challenge presented him, even considering the poisonous political environment. We believe that order is going to be brought to Iraq. This example of potential consequence for rogue nations will hopefully promote peace in the Middle East. We also believe that a positive economic package will be passed, and will be coordinated with intelligent monetary. This should bode well for the economy. We are entering a presidential cycle. Historical trends are on our side. Stay strong, and remain confident.