DJ. VENEZUELA UPDATE: Top Stories, Oil Industry Status
Mar 04, 2003 (ODJ Select via COMTEX) -- Here is a summary of Dow Jones Newswires coverage of the general strike in Venezuela, including the status of oil operations, political developments, and reaction of the oil market. Full stories can be found by searching R/VE.
TOP NEWS
PdVSA Paraguana Refinery Can't Restart Cat Cracking Unit
Venezuela's state-owned oil monopoly Petroleos de Venezuela (E.PVZ), or PdVSA, over the weekend failed to restart one of its catalytic cracking units at the massive Paraguana refinery complex, a PdVSA spokesman said Monday. Due to acts of sabotage and troubles to establish a stable natural gas feed, one of the catalytic cracking units at the Amuay plant that should help achieve a production of around 140,000 barrels per day of gasoline couldn't be started up, the PdVSA spokesman said.
Venezuela Feb CPI Soars To 5.5%, Highest in 7 Yrs
Venezuelan consumer prices soared in February up to its highest level in seven years by 5.5%, up from 2.9% the previous month, the Central Bank said in its monthly report over the weekend. The price increase was significantly higher than February last year when inflation stood at 1.8%. Accumulated inflation for the year 2003 stands at 8.4%, the Bank reported. Price controls on certain products pushed prices higher while expectations of a new currency control regime of which details are to be announced this week were among the main reasons for the jump, the bank said.
Chavez: $30/Bbl Venezuelan Oil Basket Price 'Perfect'
Venezuela's President Hugo Chavez on Friday celebrated the current spike in world oil prices and said that the price of around $30 a barrel for the nation's oil basket of crude and refined products is "perfect." "The current price is really very good...I think $30 a barrel is a fair and just price," Chavez said, speaking at the state-run television network while visiting an electricity utility in Bolivar State. Venezuela's oil basket closed at $30.90 Friday and is trading some $5 below West Texas Intermediate, WTI, and almost $4 below Brent. World oil prices are hovering around $35 a barrel on fears a possible U.S.-led war in Iraq could cause a disruption of Mideast oil. Chavez didn't say what the Organization of Petroleum Exporting Countries should do at its meeting March 11 in Vienna. The possible intervention in Iraq is seen around that time and is hampering OPEC's ability to respond and ease world oil prices.
Venezuela May Adjust Avg Price Oil Basket 2003 - Report
The Venezuelan government may adjust the 2003 targeted average of $18 a barrel for its basket of crude oil and refined products, El Nacional reported Friday. A final decision to hike the average target price to $20 or $22 a barrel on which the nation's federal budget is based has to wait until the end of March, El Nacional reported, citing a government study. That is because of the possibility of a U.S.-led intervention in Iraq sometime in March, which could affect world oil markets seriously. Also, by then the recovery of the oil industry should be complete after a strike at the nation's oil behemoth Petroleos de Venezuela SA (E.PVZ).
Venezuela Crude Production At 1.58M B/D - Ex-PdVSA Staff
Crude production at Venezuela's state-owned oil monopoly Petroleos de Venezuela SA (E.PVZ) currently stands at 1.58 million barrels a day, former staff of PdVSA said in a daily report late Thursday. However, Venezuela's Oil Minister Rafael Ramirez told reporters in Washington Thursday crude oil production has risen to 2.08 million b/d from 150,000 b/d in early January when widespread worker protests and walkouts paralyzed the PdVSA. Production is likely to reach 2.7 million b/d by mid-March and 2.9 million b/d by the end of March, he said.
Venezuela Strike Damage Seen At $7.6 Bln - Report
The nationwide strike in Venezuela that lasted two months and crippled the vital oil industry has cost the nation $7.6 billion due to lost economic production and fiscal contribution, the local daily El Nacional reported Friday. Total loss of production in the economy caused by the strike is estimated at $6.2 billion of which $2.7 billion comes from the oil sector and $3.5 billion from the non-oil sector, El Nacional reported, citing a report of the Finance Ministry. Added to that is a loss of $1.4 billion in fiscal income for the state, El Nacional said. The Finance Ministry couldn't be reached for additional comment. The damage caused by the strike is seen as long-term and severe, the report said.
SPECIAL REPORTS
Burning Across World Economy Energy Prices Hamper Growth
Almost 30 years after an energy crisis was blamed for the lights on the U.S. national Christmas tree staying off, rampaging oil and gas prices are once again eating into consumption and growth across the global economy. The 77% leap in energy prices over the past year hasn't yet sparked the alarm seen in 1973, when customers experienced electricity blackouts even before the Organization of Petroleum Exporting Countries imposed an oil embargo that pushed prices to levels previously thought impossible. But the rally in the price of oil, natural gas and a host of energy products has raised a slew of concerns about the longer-term repercussions for global growth. Some economists believe a sustained period of higher prices could tip the U.S. and other major economies back into recession.
OIL MARKET REACTION
Crude oil futures rallied Tuesday, staging a sharp recovery after three straight sessions of declines on hopes that a war with Iraq could be averted. Between Thursday and Monday, prices fell sharply as Iraq's increased cooperation with U.N. weapons inspectors and Turkey's rejection of access to U.S. troops sparked speculation that a U.S.-led attack on Iraq could be staved off or at least delayed by several weeks. But prices turned around Tuesday as the U.S. stepped up military preparations for a possible war and indicated it would seek the United Nations Security Council approval of a resolution on military action next week, analysts said. "The market had false perceptions of peace yesterday," an analyst said. "People were thinking that somehow Saddam Hussein's destroying the missiles and the lack of the Turkey vote would end the war." At the New York Mercantile Exchange, the nearby April crude oil futures rose $1.01 to end at $36.89 a barrel after rising as high as $37.18 intraday. At 2108 GMT, the April contract is 2 cents higher at $36.91 in overnight trade.
-By Beth Heinsohn, Dow Jones Newswires; 201-938-4435; beth.heinsohn@dowjones.com