www.news24.com 27/02/2003 09:39  - (SA)  

Singapore - Oil prices continued their upswing in Asian trading on Thursday on the strong likelihood of an Iraq war, blizzards and low inventories in the United States and tensions on the Korean peninsula.

New York light sweet crude for April delivery was trading around US$38.30 in after hours trade, US60c above its close.

"The day to day volatility is going to continue before any military action takes place between the United States and Iraq," said Victor Shum, senior partner of international energy consultants Purvin and Gertz Inc.

Shum said he believed it would be a short war after which the war price premium of $5 to $8 would disappear quickly and prices stabilise.

"But you never know what is going to happen on one day or another," he said, referring to outside factors such as North Korea testing missiles.

The blizzards and low inventories in the United States as well as strikes by oil workers in Venezuela and Nigeria were other factors hitting the market, he said.

Traders said Russian and West African oil producers were moving crude into Asia, especially Japan and South Korea, where inventories remained at comfortable levels.

Saudi Arabia was also seen chartering tankers for increased crude exports, according to SG Economic Research.

With more crude being made available on fears of supply disruption during the war, traders were already discounting a major price correction after a military conflict in the Middle East. - Sapa-AFP

www.casperstartribune.net By DUSTIN BLEIZEFFER Star-Tribune energy reporter Thursday, February 27, 2003

GILLETTE -- Natural gas producers are enjoying the high side of the ebb-and-tide pricing market now nearing the $4.50 per thousand cubic feet (mcf) of gas mark at Wyoming trading hubs, according to Enerfax Daily. Cold winter weather in the eastern portion of the U.S. has helped boost prices for all producing areas, including the Rockies -- an area that was slammed this past summer with prices that dipped to $1 per mcf and below. Such seasonal changes are expected in the natural gas pricing market. But in a telephone conference Monday about his company's pending merger with Ocean Energy, Inc., Devon Energy Corp. chairman, president and CEO Larry Nichols proclaimed natural gas prices could remain on the high side for a long time to come. "We have moved into a new era of gas prices," Nichols said. Speaking of natural gas pricing at Louisiana's Henry Hub, Nichols added, "The days of trading at $2 (per mcf) or less are gone forever. Because of the way storage is being depleted, we are going to see some of the highest gas prices in history." Stu Wagner, a natural gas market analyst with Petrie Parkman & Co. in Denver, said he agrees natural gas prices are not likely to dip to this past summer's lows, and there's many reasons to believe prices will remain strong for the rest of 2003. "We'd agree that the era of $2.50 gas is over. That is, at Henry Hub," Wagner said, noting that the Rockies still trails the rest of the nation's wholesale natural gas prices by about $2 per mcf. "We've had a very strong withdrawal from storage as a result of cold weather, and we've had a low rig count for the past 18 months, and we're not replacing production," Wagner said. Cold weather is depleting gas storage -- now nearly 43 percent below one year ago, according to the Energy Information Administration. However, there are other forces at play. Wagner said the price of crude oil has been pushed to the mid-$30 per barrel due to the possibility of war in Iraq and the oil strike in Venezuela. Natural gas pricing follows crude pricing, and both have been on the rise. "If there is war in Iraq and it's settled relatively quickly without a lot of interruption to crude oil supplies, we think you'll see crude oil drop down to the mid- to low $20s per barrel. And we'd expect some sympathy reaction from natural gas," Wagner said. Nichols said Devon Energy's North American operations are focused mostly on natural gas, and that focus will remain given the future pricing climate. "Prices will knock out some demand, but it can't knock out all the demand," Nichols said in the telephone conference. "This year is the first time since 1986 that Canadian imports actually fell. ... We think it's going to be robust for natural gas all year long."

www.journalnow.com Thu, February 27, 2003 By Michael Biesecker JOURNAL REPORTER

Whenever weather forecasters call for ice and snow, Randy Hayes knows to expect a busy day.

A delivery driver for Quality Oil Co., Hayes crisscrossed southern Winston-Salem yesterday, topping off tanks with home heating oil.

"We're just like the grocery store," he said, his breath expelling a cloud into the falling sleet. "Whenever there's going to be bad weather, we get a lot of business."

As with other petroleum products, the price of heating oil has risen dramatically in recent months. According to the U.S. Department of Energy, yesterday's average price in North Carolina was $1.52 a gallon - a 49 percent jump from a year ago and a new high for the state.

The increased cost for oil has strained household budgets, especially for those living on fixed incomes.

"I just get Social Security," said Betty Robbins, who had her tank filled by Hayes yesterday. "I've spent a lot more on oil this winter because of the storms, and the price just keeps going up."

Officials said that the increase is the result of higher demand for fuel oil during the unusually harsh winter, a prolonged strike in Venezuela and uncertainty about war in Iraq.

"Heating-oil prices are tied directly to the crude-oil market," said John Cogan, a spokesman for the Energy Information Association, the statistical arm of the federal Energy Department. "This year, those three factors have conspired to push crude prices upward."

The high cost of oil has drained the resources of agencies that help those who otherwise wouldn't be able to pay their heating bills.

"We're helping as many people as we can," said Jim Campbell, the emergency-assistance coordinator for the Forsyth County Department of Social Services. "We're getting about twice as many calls as last year."

Campbell said that during a cold week, his office has been processing about 120 applications for heating assistance each day. Because of increased fuel costs, the department can only afford to pay for about 100 gallons of heating oil or kerosene for each family - roughly a one-month supply.

The county receives $400,000 a year in federal crisis-intervention money to help poor, elderly and handicapped people with home-heating and cooling bills. Campbell said that the program will probably run out of money before spring, leaving nothing to help with energy costs this summer.

"If you have to choose between heat in the winter and air conditioning in the summer, heat is going to win," he said.

• Michael Biesecker can be reached at 727-7338 or at mbiesecker@wsjournal.com

• People who need help paying heating bills can call the Forsyth County Department of Social Services at 727-2060.

www.thetandd.com By The T&D Staff

The three-week streak of seeing gasoline prices spike upwards has ended. Prices throughout The Times and Democrat Region stabilized this past week. In Wednesday's survey of selected stations throughout The T&D Region, the least-expensive gasoline found sold for $1.459 at the Shell E-Z Shop at U.S. 21 and Highway 22, near Interstate 26 exit 139. At Santee, gasoline sold for $1.479 a gallon for regular unleaded at the Horizon E-Z Shop on Highway 6. In Orangeburg, the least-expensive sold at five area stations for $1.519. See survey for stations.

Fogle's Piggly Wiggly in Neeses also sold for $1.519. The most expensive gasoline of stations surveyed sold in Bamberg and Branchville for $1.579. Stability at the pumps follows a two-week period which saw gas prices rise 7 cents per gallon pushing pump prices to near record levels. The average price for gas nationwide, including all grades, was approximately $1.70 early this week, according to the Lundberg Survey of 8,000 stations. The price was within 7 cents of $1.77, the all-time high recorded by the survey in May 2001. Gasoline cost about $1.63 a gallon on Feb. 7, the date the last survey was taken, an increase of 11 cents over the previous two-week survey. However, like local numbers, Trilby Lundberg sees some light at the end of the tunnel. "The pace of gas prices has already slowed," Lundberg said. "The other indicators show a possible decrease in prices." Increased production in Venezuela, the approach of warmer weather and the reopening of various U.S. refineries which had been idled for annual maintenance are expected to slow or end the price spiral, Lundberg said. Crude oil prices are also up due to fears of war with Iraq, but if the U.S. goes to war, or if the crisis is resolved, experts say that oil bubble will burst. Prices rose 30 cents a gallon in 1990 after Iraq invaded Kuwait and then dropped 30 cents in 1991 following the Persian Gulf War. As The T&D continues its weekly gas survey, we encourage readers to get involved. If you know of a gasoline price consistently lower than those in our survey, let us know by e-mail at news@timesanddemocrat.com, by fax at 803-533-5595 or by phone at 803-534-1060. The prices must be consistently low for inclusion in the survey. Here are some of the prices found Wednesday morning, Feb. 26: Orangeburg -- Li'l Cricket at U.S. 301 and Highway 70: regular unleaded, $1.519. -- Henry's on U.S. 301: regular unleaded, $1.519. -- Dodges Store at U.S. 301 and Cannon Bridge Road: regular unleaded, $1.519. -- Horizon E-Z Shop, Shillings Bridge Road: regular unleaded, $1.519. -- Horizon E-Z Shop, Old St. Matthews Road: regular unleaded, $1.519. -- Hot Spot on Calhoun Drive: regular unleaded, $1.529. -- Speedway, Boulevard Street and Carolina Avenue: regular unleaded, $1.539. -- Gazbah Exxon, Chestnut and Ellis: regular unleaded, $1.539. -- Short Stop, Magnolia and U.S. 178: regular unleaded, $1.539. -- Big D's Shell, Magnolia Street and U.S. 178: regular unleaded, $1.539. Neeses -- Fogle's Piggly Wiggly, Highway 4 and U.S. 321: regular unleaded, $1.519. Bamberg -- 3-Way Food Mart, Main Highway: regular unleaded, $1.579. -- Horizon E-Z Shop West, U.S. 78 West: regular unleaded, $1.579. -- Horizon E-Z Shop on U.S. 301 South: regular unleaded, $1.579. Branchville -- Horizon E-Z Shop, Freedom Road: regular unleaded, $1.579. Holly Hill -- Amoco Food Mart, Old State Road: regular unleaded, $1.499. Santee -- Horizon E-Z Shop, Highway 6: regular unleaded, $1.479. St. George -- Fast Point Food Store, on Highway 78 and Sears Street: regular unleaded, $1.529. St. Matthews -- Amoco, Highway 6: regular unleaded, $1.529.

www.omaha.com Published Thursday February 27, 2003 BLOOMBERG NEWS

WASHINGTON - The decline in consumer confidence this month wasn't a surprise because higher gasoline prices brought on by events in Iraq and Venezuela are hurting consumer incomes, Federal Reserve Chairman Alan Greenspan said Wednesday.

The Conference Board reported Tuesday that its February index of consumer confidence plunged to a nine-year low of 64 from 78.8 in January. Greenspan blamed a 41 percent rise in gasoline prices over the past three months.

"Consumer confidence indexes tend to be affected to events consumers are acutely aware of, such as the dramatic rise in gasoline prices," Greenspan told a Senate hearing on deposit insurance. The size of the index decline "is a surprise but not the direction," Greenspan said.

Except for a 17-point drop the month of the terrorist attacks, the 14.8-point decline was the largest since April 1980, when a U.S. mission to rescue American hostages in Iran failed.

A sustained drop in confidence could foreshadow weaker consumer spending, which accounts for two-thirds of the economy. That possibility is "a cause for concern," Peter Fisher, the Treasury Department's undersecretary for financial markets, told the senators.

Gas prices are up on fears of war with Iraq and supply constraints because of a strike by oil workers in Venezuela. Together, the two nations pump about 7 percent of the world's oil.

For now, the increase "is an actual constriction in the available cash households have for things," Greenspan said. "Their real incomes, in that regard, have been taxed."