Wednesday's Commodities Roundup

www.heraldtribune.com The Associated Press

Crude oil futures ended higher Tuesday, as traders awaited weekly inventory data and President Bush's State of the Union address.

"What news is out there is not big enough to drive the market one way or another," said Jan Stuart, an analyst at ABN Amro in New York, referring to the market's lackluster performance.

On the New York Mercantile Exchange, nearby March crude rose 38 cents to close at $32.67 a barrel

February heating oil slipped 0.39 cent to close at 93.04 cents a gallon. February gasoline jumped 2.57 cents to close at 92.72 cents a gallon.

On London's International Petroleum Exchange, March Brent advanced 38 cents to close at $30.24 a barrel Natural gas for February delivery rose 4.8 cents to settle at $5.44 per 1,000 cubic feet.

Bush is expected to use his annual speech to Congress to persuade the American public that Iraq's weapons of mass destruction and links to the al-Qaida terrorist network pose a threat to the nation.

Bush spokesman Ari Fleischer said that "from the president's point of view, it remains a very grave threat" that Saddam Hussein will strike soon at U.S. interests. However, Bush plans neither a declaration of war nor an announcement of what Iraq's last-ditch deadline is for complying with a demand to disarm in his address.

Secretary of State Colin Powell will present new evidence on Iraqi weapons of mass destruction, perhaps at the United Nations, early next week, officials said.

Although growing international calls for more inspections helped spur Monday's sell-off, traders remain jittery as the United States steps up preparation for a possible attack on Iraq.

Traders fear that an attack would lead to a large-scale disruption of oil supplies from the Middle East - a concern that was heightened by comments from Iraqi Deputy Prime Minister Tariq Aziz.

"Kuwait is a battlefield and American troops are in Kuwait and preparing themselves to attack Iraq," Aziz told Canada's CBC television. "If there will be an attack from Kuwait, I cannot say that we will not retaliate."

Separately, Venezuelan oil output topped the 1 million barrel a day mark, according to dissident workers at state-owned monopoly Petroleos de Venezuela.

The increase in output and exports comes amid signs of a breakdown in the eight-week-old general strike.

The erosion of the strike could result in further increases in output, but longer-term, the erosion is bullish because it means President Hugo Chavez "stays in power, and PdVSA does not go back to the efficient company that it was," Jan Stuart of ABN Amro said.

Meanwhile, traders were awaiting weekly inventory data from the American Petroleum Institute and the Department of Energy due out early Wednesday.

The data is expected to show an average decline of 2 million barrels in crude oil stocks for the week ended Jan. 24, according to a Dow Jones Newswires survey of analysts.

Distillate stocks, which include heating oil and diesel fuel, are expected to show a decline of 4.4 million barrels, while gasoline inventories are mostly seen building by about 1.25 million barrels.