Reuters, 03.24.03, 4:12 PM ET By Manuela Badawy and Barbara Lewis NEW YORK/LONDON, March 24 (Reuters) - U.S. oil refiners are scrambling for alternatives to crude supplies lost from strife-torn Nigeria, eager to avoid being caught short as gasoline demand rises for summer, traders said on Monday. While there is plenty of lower-quality crude available on international markets, it is Nigerian crude's high gasoline yield that refiners will miss as the oil industry seeks to step up gasoline production for the vacation driving season. Energy multinationals ChevronTexaco (nyse: CVX - news - people), Royal Dutch/Shell <RD.AS> <SHEL.L> and France's TotalFinaElf <TOTF.PA> have shut most of their operations in the country's oil-rich Niger Delta with total losses of 817,000 barrels per day (bpd), or 37 percent of the West African country's 2.2 million bpd production. "The enhanced instability may continue for a considerable period, and we would not count Nigerian production as being a secure supply source for a while to come," said Paul Horsnell, oil analyst at J.P. Morgan in a research note. Refiners' options have already been restricted by supply disruptions in Venezuela since December and the loss of Iraq's crude exports last week as the U.S.-led forces launched a military offensive against Baghdad. Heavy shipments expected from Saudi Arabia in the coming weeks have yet to roll into U.S. storage tanks as U.S. crude inventories wallow near 25-year lows. Saudi supplies will in any case be heavier and higher in sulphur, or more sour, than the Nigerian light, sweet crudes which are good for making gasoline. As a result, prices are rising sharply for the U.S., Latin American and North Sea crudes that refiners can use as alternatives. Nigeria is one of the top six oil exporters to the United States, sending more than 560,000 bpd last year. "We are getting a knock-on effect on the domestic grades. Light Louisiana Sweet differentials for both April and May have strengthened, the (Colombian) Cusiana market will firm and (the disruptions) will support North Sea differentials," a U.S. crude trader said. FORCE MAJEURE The Ijaw ethnic group at the center of Nigeria's tribal violence and an army crackdown that led to the shutdowns vowed to strike in the eastern half of the delta if soldiers attacked them. Oil industry officials said they feared the a growing military campaign could further inflame the situation if the army launched reprisal attacks over the killing of a dozen soldiers by militants in recent weeks. Shell and ChevronTexaco have declared force majeure on Bonny Light , Forcados and Escravos oil exports from March 22, with expected delays on Bonny Light of up to five days and Forcados loadings by three to 14 days, depending on the cargo. U.S. refiner Sunoco (nyse: SUN - news - people), a steady buyer of Nigerian crude, has already turned to the depressed North Sea market to replace the lost barrels with Norwegian Ekofisk , a sweet crude, traders said. The heavy volumes expected from Saudi Arabia, which already stepped up production sharply this year to make up for the shortfall from Venezuela, make the loss of Nigeria's supply manageable as long as it does not drag on. "The market was so bearish, it needed something like this," a crude trader said. "Now sellers are going to be a bit more proud of their cargoes and push up differentials." But with U.S. refiners looking to ramp up gasoline production in coming weeks ahead of summer, they will be anxious to replace any lost Nigerian cargoes quickly. "Anybody who had something loading this week is going to be looking for some substitute. They could look to the North Sea where there is plenty of April-loading crude available," a North Sea trader said. Substitute cargoes from the North Sea take 12 to 13 days to reach U.S. shores compared to the 15-day voyage from Nigeria. Refiners have the advantage that Latin American and North Sea grades have both been weakening before news of the Nigerian problems. Prices for Colombia's sweet Cusiana dropped about 30 cents from the previous month, while UK and Norwegian crude differentials having fallen by as much as 60 cents in the past week. The spread between U.S. benchmark West Texas Intermediate crude and North Sea Brent has been around $2.50 in recent days, wide enough to make the shipment across the Atlantic economic for some grades, dealers say. Cheaper shipping rates have also encouraged transatlantic shipments.

<a href=www.hpj.com>High Plains Tuesday, March 25, 2003  Good Morning!   We feel it in our pocketbooks every day. Gasoline and other energy prices have been on the rise. In mid-March, regular gasoline prices reached a record high of $1.73 per gallon. Prices are 40 percent higher than last year at this time, according to this week's public policy brief from Roy Frederick, Public Policy Specialist, Department of Agricultural Economics, University of Nebraska-Lincoln.

Many factors have contributed to recent price hikes. A petroleum workers' strike in Venezuela, the buildup to war in Iraq and operating problems at some U.S. refineries lead the list.

More fundamentally, we must acknowledge our ever-growing dependence on foreign oil. The U.S. Energy Information Administration recently estimated this year's domestic demand at just over 20 million barrels per day. Of this total, less than 6 million barrels are expected to come from our own production. Never before has the gap between usage and production been so wide.

By comparison, worldwide petroleum demand this year is estimated at 77 million barrels per day. Thus, the United States, a country with 4 percent of the world's population, accounts for 26 percent of the worldwide petroleum market.

In a time of international unrest, America's skewed share of the worldwide oil market could work both for and against us. On the positive side, some big oil suppliers, such as Saudi Arabia, know that their own economies depend on U.S. oil purchases. They are reluctant to allow political differences to disrupt cash flows into their own treasuries.

At the same time, Frederick wrote, the United States can hardly feel smug depending on others as much as we do for a critical resource like oil. Even a 10 percent disruption in supplies probably would cause gasoline and other energy prices to spurt much higher.

The Organization of Petroleum Exporting Countries, led by Saudi Arabia, produces about a third of the world's oil. But beyond ongoing production, it's excess capacity that makes OPEC the world's oil kingpin. OPEC is promising to make up any lost production from Iraq and Kuwait. And in recent days, Saudi Arabia has ramped up production with that thought in mind.

Unfortunately, lags occur from production to filling your vehicle's gas tank. For one thing, it takes at least a month for an oil tanker to make the trek from the Middle East to the U.S. Gulf Coast. Figure on another month to move imported oil through refineries and distribution systems. This suggests that it will be late May before gasoline shortages begin to ease. Even then, I can't be optimistic about lower prices at the pump.

Increased supplies are likely to occur at about the same time that the heavy summer driving season begins. Moreover, refiners say that they haven't increased gasoline prices as much as they should have over the past few months. They will try to recoup with higher margins as crude oil supplies become more plentiful. For the foreseeable future, you'd better plan on a much lighter wallet after each fill-up.

AAA Kansas. David Dinell  

A weekend easing of retail gas prices in Wichita shows that there are many other factors involved in gas pricing than an outbreak of war in the Middle East, says Amanda Millard, spokeswoman for AAA Kansas.

According to AAA Kansas, at noon Monday, the average price for a gallon of regular gas in Wichita was $1.64, down 1 cent from Sunday and 5 cents from last week. Premium also has taken a drop and is down 5 cents, from $1.80 last week to $1.75 this week, despite even rougher conditions in the Iraq war.

"There are so many other variables than war," Millard says.

The main factor has been the increased oil supply from Venezuela, which had pumping problems that were non-war related. Other countries have continued to supply oil at pre-war levels, she says.

Also, there has been no panic buying in Wichita and other areas, Millard says. Millard says there is no reason for consumers and businesses to make panic purchases of gasoline.

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"That just starts a vicious cycle," she says.

<a href=www.waka.com>WAKA 03/24/2003 Amber W. Moody Are gas prices on the way down? In our search for the lowest price today, you'd better head to the Southern Boulevard, with Entec and Cowboys both at $1.54 for a gallon of regular unleaded. At the Entec in Prattville you'll pay $1.57 for a gallon of unleaded fuel. The Entec on the Northern Boulevard is a $1.58. Across town on the corner of Day Street and Airbase Boulevard the Citgo is charging a $1.56. According to the Lundberg survey of 8,000 gas stations, the average price for gas nationwide, including all grades and taxes, was about $1.76 a gallon on Friday. The Lundberg suvey finds the price of gas is leveling off now due to factors including the perception that the war will not substantially impact Iraqi oil production, Venezuela's comeback after the strike, and production increase by Saudi Arabia, Kuwait and others.

<a href=www.lassennews.com>Where is Lassen County? Posted on Monday, March 17 @ 10:15:10 PST By Janine Fairbank Staff Writer

In Susanville, the average price for a gallon of regular unleaded gasoline was about $2.12 as of Friday, March 14, and some say the price could even go higher. Bill Harkness, plant manager for Staub Energy in Susanville said many factors caused the recent rise which affect a commodities market such as the oil industry.

Harkness, who has been in the petroleum business for 17 years, three with Staub, said most crude oil is bought from the MidEast, Mexico and Venezuela. Because of the long-lasting strike halting drilling operations in Venezuela, which supplies 15 percent of the world's oil, he said there is definitely a shortage of crude oil, which raises the price.

Crude oil is used to make products such as gasoline, heating oil, motor oil and propane, which is in high demand right now, said Harkness.