www.alertnet.org NEWSDESK   21 Jan 2003 22:23

By Tom Doggett

WASHINGTON, Jan 21 (Reuters) - The cost for a gallon of motor fuel in the United States reached its highest level in 16 months, as drivers suffered a sixth week of rising gasoline prices, the Energy Department said on Tuesday.

The average price for regular unleaded gasoline jumped half a penny over the last week to $1.459 a gallon -- up 35 cents from a year ago -- based on a survey of more than 800 service stations by the department's Energy Information Administration.

That is the highest since late Sept. 2001, when the Sept. 11 terror attacks caused a panic surge in energy prices.

The national price for cleaner-burning reformulated gasoline, which is sold at about one-third of the gas stations in more polluted metropolitan areas, increased 1.8 cents in the last week to $1.534 a gallon, EIA said.

Gasoline prices are rising in response to traders' fear of a U.S. war with Iraq and the disruption in oil exports from Venezuela -- a major oil producer -- caused by a workers' strike now in its eighth week.

The price of crude accounts for about 40 percent of the cost of a gallon of gasoline. In Tuesday trading in New York, oil soared above $35 a barrel, the highest level in 26 months.

Venezuela is the fourth-biggest foreign oil supplier to the U.S. market and the lost oil exports have depleted American crude inventories to their lowest level since the mid-1970s.

The West Coast had the most expensive regular unleaded gasoline over the last week, with the average weekly price in the region up 3 cents to $1.548 a gallon, EIA said.

The Gulf Coast states had the cheapest fuel, as the average price was up 0.8 cents to $1.407 a gallon.

Among cities, San Francisco maintained its top spot in fuel costs, with the price up 4.3 cents to $1.762 a gallon. Houston had the best deal at the pump, with the price up a penny to $1.389 a gallon.

The report also showed gasoline prices were up 4.4 cents in Los Angeles at $1.577, up half a penny in New York City at $1.554, up 1.7 cents in Chicago at $1.521 and down 0.9 cents in Denver at $1.44.

The biggest year-on-year change in city pump prices was in San Francisco, where gasoline costs were up 49 cents a gallon from a year earlier.

Separately, the nationwide price for diesel fuel rose 0.2 cents to $1.48 a gallon, up 34 cents from last year.

Truckers in New England paid the most for diesel fuel at $1.594 a gallon, up 0.1 cents from the prior week. The Rocky Mountain states had the cheapest diesel at $1.445 a gallon, unchanged from the previous week.

www.quicken.com Tuesday, January 21, 2003 05:00 PM ET  Printer-friendly version   NEW YORK (Dow Jones)--The national average retail price of regular gasoline rose by 0.5 cent a gallon in the week ended Monday to $1.459, the highest price since Sept. 24, 2001, the Energy Information Administration said Tuesday.

Release of the weekly survey of 900 retail outlets was delayed by a day due to a holiday on Monday.

Prices were up 35.4 cents from a year earlier.

Prices were up for the sixth straight week, gaining 9.9 cents, or 7.3%, since Dec. 9. Crude oil and gasoline prices have gained in recent weeks on concerns over a continuing strike in Venezuela - the fourth-biggest oil supplier to the U.S. - and worries about the potential for a U.S. war with Iraq.

In the latest week, prices rose in all regions, except the Midwest where they were down slightly.

On the East Coast, gasoline prices rose by 0.2 cent to $1.462 and were 36.5 cents up from a year ago. That's the highest level since July 2, 2001.

Midwest prices slid 0.4 cent to $1.438, and were up 35.1 cents from a year earlier.

Gulf Coast prices were up 0.8 cent to $1.407 and were 35.8 cents higher than a year earlier. The price is the highest since June 25, 2001.

Rocky Mountains prices were up 0.1 cent at $1.414, and were 28.9 cents up from a year earlier.

West Coast prices were 3 cents higher at $1.548 and were 35 cents higher from a year earlier. That's the highest level since last July 15.

• By David Bird, Dow Jones Newswires; 1-201-938-4423; david.bird@dowjones.com

cbs.marketwatch.com By CBS.MarketWatch.com Last Update: 2:20 PM ET Jan. 21, 2003

HOUSTON (CBS.MW) -- Shares of BJ Services fell Tuesday after the company said the weak market conditions that cut its first-quarter profit in half will likely continue into the second quarter.   CBS MARKETWATCH TOP NEWS Stocks sink as war jitters overshadow earnings Housing starts soar to 16-year high Airlines hit '03 lows as losses mount 3M beats by a penny and raises outlook Free! Sign up here to receive our Weekly Roundup e-Newsletter!

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Shares of the oilfield services company (BJS: news, chart, profile) fell by $1.07 to $30.98.

BJ posted a profit of $33.5 million, or 21 cents a share for the first quarter, compared to the average 22-cent-per-share estimate of analysts polled by Multex. A year ago, it earned $66.9 million, or 42 cents per share.

Revenue reached $473.1 million -- below market expectations of $489.3 million and last year's $510.1 million.

Chairman J.W. Stewart said BJ Services remains "optimistic about increased activity in the U.S. market," but expects that "activity will continue at present levels until late Spring.

As a result, Stewart said BJ Services would likely earn 22 cents to 25 cents per share for the second quarter and $1.05 to $1.15 per share for the full-year 2003.

A Thomson First Call poll of analysts pegged expectations at 28 cents and $1.23 per share, respectively.

Tidewater Q3 matches target

Tidewater reported a third-quarter profit Tuesday that matched Wall Street's average target, but said market conditions will likely remain the same for the fourth quarter.

Tidewater shares fell 70 cents to $29.16.

The company (TDW: news, chart, profile) said third-quarter profit reached $23.6 million, or 42 cents per share, compared to $33.5 million, or 60 cents per share a year ago. The latest results were in-line with the 42-cent average of per-share profit estimate of analysts surveyed by Multex.

The company reported third-quarter revenue of $163.1 million, vs. $181.8 million in the year-ago quarter and a Wall Street target of $164.4 million.

During a conference call Tuesday morning, Chief Executive Dean Taylor said the company currently anticipates that conditions in the March quarter should be similar to that of the December quarter.

But given the uncertainty surrounding Iraq, Venezuela and situation in the Gulf of Mexico, there is "greater possibility of change, either up or down, than there was in the quarter just reported," he said.

Still, Taylor voiced confidence that "good times are coming."

Oil stocks ease on quarterly data

Oil stocks fell Tuesday as disappointing quarterly earnings and outlook from BJ Services fueled investors' concerns that upcoming earnings from major oil companies will be weak.

See Energy Stocks.

Crude awaits moves on Venezuela strike

Efforts to end Venezuela's eight-week strike intensified Tuesday, but with production from the world's fifth-largest oil supplier continuing at reduced levels, crude futures remained well above $30 a barrel.

news.ft.com By Carola Hoyos in New York and Adrienne Roberts in London Published: January 21 2003 20:04 | Last Updated: January 21 2003 20:04

Refiners are facing the possibility of being forced to reduce their operations as US crude oil inventories reach historic lows.

Inventory data to be released on Thursday are expected to show that the US's commercial levels of crude oil have dropped below the 270m-barrel level at which the distribution system of pipelines and oil storage tanks begins to falter.

Even without technical difficulties, refiners faced with diminishing profit margins because of low crude oil supply and high levels of gasoline stocks are considering slowing their operations, possibly foreshadowing an expensive season for US motorists this summer.

George Beranek, manager of market analysis at PFC Energy, a Washington-based consulting firm, expects refiners to slow down operations because of the recent supply squeeze caused by the crisis in Venezuela. That has taken more than 70m barrels of crude oil out of the world market.

Citgo, which relies on Pdvsa, Venezuela's state oil company and Citgo's parent, for half its crude oil, has been hardest hit, as have refiners that process Venezuela's heavy crude oil and for whom lighter grades from other Opec countries are imperfect substitutes.

According to the International Energy Agency, the US is not the only region to suffer from falling oil inventories, with European and Pacific supplies also showing significant losses.

Although Venezuela's exports are slowly increasing and US refiners welcomed Tuesday's news that oil tanker workers in western Venezuela were on the verge of going back to work, they warn that the interruption is far from over.

A breakthrough in Venezuela would be good news for US President George W. Bush, who has come under increased pressure to release some of the 600m barrels of the country's strategic reserves to help cool oil prices.

They have recently flirted with two-year highs because of Venezuela's woes and the possibility of war with Iraq.

But the Bush administration is keen to hold on to as many of its own extra barrels as possible following Opec's decision at its meeting in Vienna earlier this month to dip into its additional production capacity, promising to increase production by up to 1.5m b/d.

John Felmy, chief economist at the American Petroleum Institute, an industry group, agrees, arguing that the US needs to "keep its powder dry".

That will be especially important if the US intends to go to war in Iraq.

Venezuela's outage has prompted US refiners to rely increasingly on Iraqi crude oil exports in the past two months, and Opec has already made clear that it would find it difficult to make up for a loss in production from both Venezuela and Iraq.

Public oil supplies - government-controlled oil at the EIA's disposal in an emergency - are about 1.28bn barrels. This includes about 595m barrels in the US strategic petroleum reserve.

The IEA, which controls strategic oil reserves for 26 industrialised countries, says public oil stocks would be enough to cope with a crisis the size of the 1978-1979 Iranian revolution. That was the largest disruption in history and, analysts say, the closest precedent to a combined Venezuelan/Iraqi outage.

www.forbes.com Reuters, 01.21.03, 8:45 AM ET

HOUSTON, Jan 21 (Reuters) - Lyondell Chemical Co. (nyse: LYO - news - people) said production at its joint-venture refinery in Houston is at 85 percent of its capacity of 270,000 barrels per day (bpd).

Production at Lyondell-Citgo Refining LP is running between 220,000 and 230,000 bpd, the Houston-based company said in astatement Monday.

In late December, the refinery shut a crude unit accounting for half of oil processing capacity because it was unable to obtain the sour Venezuelan crude that unit is configured to handle. A general strike in Venezuela has slashed oil output from that country. Prior to the strike, Lyondell-Citgo received about 230,000 bpd of oil from Venezuela.

The company said it has restarted the crude unit. It also said availability of spot and Venezuelan contract crude has improved the refinery's ability to operate.

Lyondell-Citgo is a joint venture between Lyondell and Citgo Petroleum Co., which is an indirect, wholly-owned subsidiary of Petroleos de Venezuela SA, the state oil company of Venezuela.