www.manilatimes.net Saturday, March 1, 2003 By Maricel E. Burgonio, Reporter

WITH oil prices hitting all-time highs, the Department of Energy yesterday warned the country is facing a fuel crisis and urged the people to help reduce consumption through energy conservation.

Energy Secretary Vincent Perez Jr. predicted that oil prices would remain volatile until the second quarter of the year due to tension over Iraq and the recent prolonged strike in Venezuela.

In a statement, Perez said the combined factors of historic low oil inventories in different countries and supply problems due to the Venezuela strike are expected to keep prices unstable.

He added an extraordinary increase in demand for oil in the US,  given the already tight supply, would also exert pressure on oil prices.

 “We are again faced with a crisis as we see oil prices increasing to recent all-time highs. This is a crisis affecúting not just the country but the rest of the world,” Perez said. “But like any crisis, this is just temporary. I appeal to our consumers to become more prudent in the use of gas at this time until the situation has eased.”

The DOE said Dubai crude, the benchmark for local oil pricing, reached its peak in two years last Tuesday to $31.18 per barrel. For February, the price of Dubai crude  averaged $29.96 per barrel from $28.02 in January.

 Investment bank JP Morgan reported that political risks remain high and oil prices are likely to go up until the situation in Iraq is resolved.

Perez urged the public to make adjustments in their consumption, such as taking the MRT instead of driving to the office. Car owners should consider car-pooling, he said.

Perez also encouraged government agencies and private firms to provide shuttle service to their employees that could bring them directly to various points..

At the same time, Perez appealed to lawmakers and other groups to refrain from issuing unnecessary statements that only further confuse the issues. Instead, the Energy chief asked their support to educate consumers to conserve gas.

reuters.com Thu February 27, 2003 04:22 AM ET By Tanya Pang

SINGAPORE (Reuters) - Oil prices shot to a 12-year high Thursday as a severe bout of winter weather in the United States drained fuel stocks, leaving energy consumers dangerously exposed ahead of possible war in Iraq.

U.S. light crude in electronic trade hit $38.66 a barrel, the highest oil price since the 1990-1991 Gulf crisis when crude peaked at over $41 shortly after Iraq's invasion of Kuwait.

London Brent LCOc1 opened up 63 cents at $33.70 a barrel, a two-year high, and U.S. heating oil futures HOc1 bolted to $1.18 a gallon, matching this week's all-time highs.

"There remains a war premium of some $2 to $6 on any given day, but there is tightness in fundamentals at the moment and oil prices would certainly be higher than normal, even without Iraq in the picture," said Paul Ashby, analyst at ABN Amro in Sydney.

The U.S. government's Energy Information Administration (EIA), said Wednesday that the nation's distillate stocks, including winter heating oil, fell 4.5 million barrels in the week to February 21.

U.S. winter demand for distillates in the last four weeks has been more than 20 percent above last year and stocks are 33 percent below year-ago levels, the EIA said.

The fall in inventories has been driven by abnormally low temperatures in the U.S. Northeast, the world's biggest heating oil market, and by lower imports from Venezuela, where oil exports have been hit by a strike now in its 12th week.

Forecasts predict colder-than-normal temperatures continuing in the Northeast through to next week.

Record natural gas prices mean factories are expected to generate additional pressure on oil stocks as they switch to using distillates for fuel.

The EIA also reported a one-million-barrel fall in crude stocks to 272 million barrels, leaving inventories at their lowest since 1975, just above the 270-million mark considered a minimum to keep U.S. refineries in operation.

SATURDAY DEADLINE FOR IRAQ

U.S. Energy Secretary Spencer Abraham said earlier this week that Washington was ready to release crude from the 600-million-barrel national reserve if it judged a war in Iraq was causing severe supply disruption.

Iraq exports roughly two million barrels per day (bpd) of crude, making it the eighth-biggest exporter, but oil markets fear war would disrupt supply from other Middle East producers, which account for about 40 percent of globally traded crude.

U.S. officials said Wednesday that Saudi Arabia, the world's biggest exporter, had agreed to increase crude production by 1.5 million bpd if Iraqi exports were interrupted by war. The kingdom is already supplying extra crude to U.S. refiners to make up for the loss of Venezuela's exports.

With Iraq facing a U.N deadline Saturday to begin destroying its al-Samoud 2 missiles, chief U.N weapons inspector Hans Blix said Wednesday that Baghdad was still not fully cooperating on disarmament despite the recent handover of new documents.

Blix is preparing a written report to the U.N. Security Council assessing progress in the search for Iraq's alleged biological, chemical and nuclear weapons. Iraq denies it possess such arms.

President Bush continued to press his case for an invasion of Iraq, saying an end to Iraq's government would create an opportunity for peace in the Middle East.

He also said the United States would protect Iraq's oil from sabotage by the country's "dying regime." Iraqi President Saddam Hussein has accused the United States of pursuing war to gain control of his country's oil, a charge denied by Washington.

china.scmp.com Wednesday, February 26, 2003 MARK O'NEILL in Shanghai

Oil prices surged last month as China rushed to increase imports ahead of a likely US-led war on Iraq, according to figures released yesterday.

However, a top transport official said the country could diversify its sources of supply to cushion the impact of an invasion.

Figures published in the Shanghai Securities News showed that last month imports of crude oil rose 78 per cent to 8.36 million tonnes, with the average price up 51 per cent, resulting in a net increase in payments of US$1.11 billion (HK$8.6 billion) as buyers rushed to secure supplies before the start of any war.

Domestic crude prices in January rose 42.7 per cent from a year earlier, while those of oil products rose 25 per cent, the report showed.

But Cui Zhenchu, the deputy general manager of the transport division of China International Oil and Petrochemicals Company - a unit of Sinopec, which accounts for two thirds of China's crude imports - said that a war would not have a great impact on imports.

Last year, China imported nearly 70 million tonnes of oil, against domestic production of about 170 million tonnes, of which half came from the Middle East, including Saudi Arabia, Iran, Iraq, Kuwait, Oman and the United Arab Emirates.

"If supplies of oil from the Middle East were cut, it would be a huge disaster for the world economy," said Mr Cui. "The United States is the biggest buyer of Middle East oil and would certainly use its military might to keep the supply lines open.

"Iraq has a limited ability to threaten these supply lines, because the range of its missiles is not long. Once the war breaks out, China can take shipments from ports far from the Gulf, such as Yemen and Oman, or Saudi ports on the Red Sea."

He said his company had a long history of co-operation with the big shipping companies that carried most of China's imports. They had been through the Iran-Iraq war and the 1991 Gulf War together, which gave him confidence that the contracts that had been signed would be honoured.

In the worst-case scenario, if oil transport was cut from the Middle East, China would increase imports from other suppliers, such as Nigeria, Angola and Sudan in Africa, Venezuela, Britain and countries in Southeast Asia, he said.

"A war between Iraq and the US would bring some risks to the shipping lanes for China's oil, but overall we can guarantee the stability and safety of the country's imports," he said.

The impact of a war on China's aviation will be limited. From February 13, Air China suspended the Karachi-Kuwait stretch of its Beijing-Karachi-Kuwait flight because of the threat of war. But other routes, a three-weekly passenger service by China Southern Airlines from Beijing to Sharjah via Urumqi and a once-weekly cargo service by China Southern from Beijing to Sharjah, are still running.

During the Iran-Iraq war, flights between China and Europe and North Africa were diverted from Middle Eastern air space to Russian air space, an arrangement that still exists.

portmacquarie.yourguide.com.au Monday, 24 February 2003

PORT Macquarie motorists, already reeling at prices of $1.04c for unleaded petrol, are fearing significant rises in the near future.

Sydney prices last week reached 107.9c, with predictions it could rise to $1.20 in coming weeks.

Fears about future oil supplies are pushing up the price of advance crude oil order on international financial markets.

The likelihood of an impending war with Iraq pushed the international oil price to a 21/2 year high of around $US37 a barrel last week.

It is possible international crude oil prices might jump to around $US45 a barrel or more, say some analysts.

This would push Australian prices up another 10 to 15 cents a litre. Oil supplies from Venezuela and Nigeria are also low.

The Australian Service Station Association has warned motorists to brace for further rises.

Economists are worried motorists will respond by cutting discret- ionary spending, reducing economic activity and retarding growth.

Petrol normally accounts for about five per cent of household budgets, so fuel price rises have a big impact on consumer confidence.

There have been a few occasions over the past couple of years when petrol in Port Macquarie has exceeded the $1 mark.

The recent increase has motorists worried that this may not be a short-term move.

Motorists have been paying more than 90c litre for the past three years with only a couple of occasions where the $1 litre mark was reached.

However, this time last year the price was in the low to mid 80c a litre bracket.

Currently Port Macquarie service stations have unleaded ranging from 102.9c to 104.9c litre.

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www.abc.net.au 24/2/2003 Steve Marshall

EMMA ALBERICI: There are growing fears that surging petrol costs will stifle the Australian economy as international oil prices continue to hit new highs. Concerns over Iraq pushed the price of crude to US$37 a barrel last week, for the first time in 2.5 years. However, industry experts say it's not just the high chance of conflict in the Middle East that's driving up the oil price. Steve Marshall explains. STEVE MARSHALL: For a man who analyses oil markets day in day out, Simon Klimt isn't panicking just yet, despite the looming conflict in Iraq. SIMON KLIMT, HEAD OF COMMODITIES, WESTPAC: No panic stations yet. We're still looking at a scenario very similar to what happened in '91. STEVE MARSHALL: The Gulf War 12 years ago shot oil to US$41 a barrel. But it was a brief war matching analysts expectations, meaning the price spike was short-lived. SIMON KLIMT: It's really only the length of time it spends at high prices that causes a problem. If we go up there for short periods of time, it really shouldn't cause too many problems for the economy. STEVE MARSHALL: Even oil companies here are optimistic. JOHN ELLICE-FLINT, MANAGING DIRECTOR, SANTOS: I think that there is always overreaction on the oil price but I think what you'll see is it coming back to the 20s, mid 20s. STEVE MARSHALL: Given the media and political focus on the link between possible conflict in Iraq and the price of oil, you'd be forgiven for thinking Iraq was the only oil supplier. But analysts point out there are several other factors affecting price. SIMON KLIMT: You've got very cold weather in the Northern Hemisphere, which is really using up a lot of oil for heating -- heating oil demand. You've got Venezuela, which produces three million barrels a day, that's been struck by a strike for quite a long period of time. And you've got Nigeria, which has just started a strike, which has about as much oil as Iraq -- about 2.5 million barrels a day -- that is currently threatened to stop coming onto the international market. So those are the real factors that are affecting the price at the moment. STEVE MARSHALL: Which ultimately affects the price we pay for petrol. And if wasn't for the strong Australian dollar, we'd be paying a lot more. The strength of the currency is actually helping keep some of the oil price pressure off the retail price at the bowser. Steve Marshall, Business Breakfast.

Please note: Transcripts on this website are created by an independent transcription service. The ABC does not warrant the accuracy of the transcripts. MULTIMEDIA: Hear the audio: War is only one factor affecting petrol prices