www.gulf-daily-news.com LONDON:

World oil prices set new two-year highs yesterday for fear of war in Iraq and then eased as cracks started to appear in a Venezuelan strike that has cut deep into exports to the US.

US light crude at 1745 GMT was down 21 cents at $34.61 a barrel after setting a fresh high of $35.20 in early electronic trade. London Brent blend eased 39 cents to $30.73 a barrel. President George W Bush said it was now clear to him that Iraqi leader Saddam Hussein was failing to comply with UN disarmament demands.

Oil dealers said the remarks appeared to leave little doubt that Washington was now close to authorising the use of military force against Baghdad.

But early price rises were contained by news from Venezuela that tanker pilots in Lake Maracaibo, a strategic export route, had ended their part in the seven-week-old nationwide strike.

"This is something that helps Chavez. A prerequisite to restart production is to get exports going, so this is a step in the right direction," said George Beranek of Washington's Petroleum Finance Company.

World oil markets have yet to respond to an Opec decision to boost output and the organisation could therefore agree to a further production hike when it convenes March 11, Opec President Abdullah bin Hamad Al Attiyah said yesterday.

www.channelnewsasia.com First created : 22 January 2003 0718 hrs (SST) 2318 hrs (GMT) Last modified : 22 January 2003 0718 hrs (SST) 2318 hrs (GMT)

World oil prices bubbled to new two-year highs on Tuesday amid escalating US war rhetoric over Iraq even though cracks started to appear in a Venezuelan strike that has cut deep into exports to the US.

US light crude in New York for February delivery, which expired at close of trade, settled up 70 cents at US$34.61 a barrel after hitting a peak of US$35.20, the highest level since November 2000.

March crude in New York, which took over as the front month contract, rose 23 cents to US$33.19 a barrel.

London Brent blend rose 9 cents to US$30.74 a barrel.

Fears of war in Iraq, the world's eighth largest oil exporter, rose as President George W Bush warned that Iraq had squandered "ample time" to avert war by disarming voluntarily, and the US ordered two more aircraft carriers to the Gulf.

Concern that war in the Middle East could disrupt the region's oil flows outweighed news from Venezuela that tanker pilots in Lake Maracaibo, a strategic export route, had ended their part in the nationwide strike.

With Venezuelan exports running at just 500,000 barrels a day, a fifth of normal levels, crude stockpiles in the US have slid close to 26-year lows just as a fierce cold snap in the US Northeast has boosted heating oil demand.

While an end to the tanker pilots' action in Venezuela could be expected to lift exports, shippers said deliveries were not likely to rise rapidly until foreign ship operators began using Venezuelan ports again.

www.austin360.com By BRAD FOSS AP Business Writer

NEW YORK (AP)--Oil prices soared above $35 per barrel Tuesday before settling considerably lower as traders balanced fears of a war in Iraq with the end of a tanker pilot strike in Venezuela.

``It was quite a move,'' Ed Silliere, a trader at Energy Merchant LLC in New York, said of the up-and-down trading session on the New York Mercantile Exchange.

The price of crude for February delivery, which had an intraday high of $35.20, closed 70 cents higher at $34.61 per barrel. It was the highest closing price since Nov. 30, 2000, when it closed at $33.82.

Silliere and other traders said some of the heaviest buying, which occurred toward the end of the day, appeared to be tied to short covering before the expiration of the February contract. That is, investors who had sold on expectations that the market would keep dropping were forced to buy to adjust their positions when prices advanced.

The advance was sparked by rhetoric from President Bush on Iraq and the realization that--even with tanker pilots back at work _ Venezuela's oil industry remains severely hobbled by a 51-day strike.

Nothing has changed,'' said Mike Fitzpatrick, a trader at Fimat USA in New York. The intensity of the strike (in Venezuela) seems to be getting worse.'' Oil production has dropped by more than two-thirds in Venezuela, from 3 million barrels a day to 800,000 barrels, the government claims. Strike leaders put the figure at 627,000.

In addition, Fitzpatrick said, ``it seems to me we've passed the point of no return for war in Iraq.''

President Bush on Tuesday chided U.N. member nations for demanding more time to search Iraq for illegal arms. A decision on whether to end diplomacy with Iraq and wage war is expected in a matter of weeks.

Another bullish factor, traders said, is the anticipation that Energy Department data scheduled to be released Thursday will show that U.S. inventories of crude have fallen below the so-called operating minimum, which typically triggers reductions in refinery output.

The operating minimum is 270 million barrels. Last week, the Energy Information Administration, the agency's statistical arm, reported storage at 272 million.

Reduced refinery output would likely send heating oil prices higher, Silliere said.

On Tuesday, heating oil for February delivery dropped 0.39 cent to 89.47 cents a gallon. February unleaded gasoline fell 1.01 cent to settle at 90.10 cents a gallon.

On London's International Petroleum Exchange, March Brent closed up 9 cents at $30.74 a barrel.

February natural gas futures trading on Nymex finished at $5.433 per 1,000 cubic feet, down 10.3 cents.

www.forbes.com Reuters, 01.21.03, 5:08 PM ET

NEW YORK (Reuters) - Oil prices surged to 26-month highs on Tuesday as the prospect of war with Iraq loomed large with more U.S. troops heading to the Gulf region, while wheat futures rose as the U.S. Great Plains growing area remained dry.

In other commodity trading, cocoa futures were mixed as the industry kept a close watch on peace talks between rebels and the government in top grower Ivory Coast. Steep falls in the stock market and dollar lured safe-haven investors to gold.

NYMEX oil futures were again buoyed by war fears, which countered the bearish sentiment sparked by news that tanker pilots on a strategic export route in No. 5 petroleum exporter Venezuela had ended their part in a nation-wide labor strike.

Venezuela, which normally supplies about 13 percent of the crude oil imported by the United States, has seen its exports hobbled by the strike led by foes of President Hugo Chavez who want the leftist leader to step down and call fresh elections.

Fears of a war with Iraq, which could disrupt the flow of oil from the world's eighth largest oil exporter, took center stage in the market. President George W. Bush said Tuesday it was "clear to me now" that Iraqi President Saddam Hussein was failing to comply with U.S. demands to disarm.

"He's delaying. He's deceiving. He's playing hide and seek with inspectors," Bush told reporters at the White House.

"Time is running out," he said, as the Pentagon ordered two more U.S. aircraft carriers and another 37,000 combat troops to deploy to the Gulf region for a possible war with Iraq.

Oil traders said Bush's remarks appeared to leave little doubt that Washington was close to authorizing the use of military force against Iraq, accused by the U.S. of concealing weapons of mass destruction. Baghdad denies the charge.

Mohamed ElBaradei, head of the U.N. nuclear watchdog agency, said that "quite a few months" were needed to complete the search for any Iraqi weapons of mass destruction.

NYMEX February crude oil ended 70 cents higher at $34.61 per barrel after hitting $35.20. February gasoline was down 1.01 cents at 90.10 cents per gallon, while February heating oil was off 0.39 cent at 89.47 cents a gallon.

CBOT wheat futures were higher, supported by concerns of possible crop damage sparked by persistent dry weather in the Great Plains growing region.

"It's the weather -- that and it's been beat up pretty bad lately," a trader said, referring to recent sharp falls in wheat futures to 6-1/2 month lows on bearish official stocks data.

Part of the strength in CBOT soft red winter wheat came from strong gains in Minneapolis spring wheat futures.

Last Friday, trade sources said industry consultant Sparks Cos. forecast that farmers will sow 14.772 million acres with spring wheat this year in the United States, down from 15.714 million in 2002.

Traders and analysts said farmers saw better financial returns from other crops such as barley and soybeans.

CBOT March wheat ended 2-1/2 cents higher at $3.19-1/4 per bushel. March corn rose 1-1/4 cents to $2.33-3/4, while March soybeans finished unchanged at $5.56 per bushel.

CSCE cocoa futures were mixed, with industry selling capping gains. The market remained focused on peace talks between rebels and the Ivory Coast government in Paris.

The negotiations continued this week at trying to bring a resolution to a bloody war since a failed coup Sept. 19. U.N. Secretary-General Kofi Annan plans to attend the Paris summit, a U.N. spokesman said.

Even as the talks were progressing, Ivory Coast's army said it had repulsed an attack by Liberia a day after Liberia said it had been attacked by Ivory Coast.

Liberians have been fighting on both sides of the four-month war in Ivory Coast.

CSCE March cocoa ended $4 higher at $2,155 per tonne. COMEX gold futures were higher as U.S. equities and the dollar slumped, and amid Bush's tough talk on Iraq.

"Gold is going to react to any type of announcement that can impact the Iraqi situation. The comments from Bush today are certainly inflammatory," said Jim Pogoda, a trader at Mitsubishi International Corp. in New York.

Gold is about 25 percent higher than a year ago, making it one of the best-performing financial assets. Last week COMEX futures hit a six-year high.

The dollar fell to its weakest level in more than three years against the euro on Tuesday on the Iraqi tension. The dollar's dip made gold more affordable to overseas buyers.

COMEX February gold ended 70 cents higher at $357.5 an ounce.

www.forbes.com Reuters, 01.21.03, 5:08 PM ET

NEW YORK (Reuters) - Oil prices surged to 26-month highs on Tuesday as the prospect of war with Iraq loomed large with more U.S. troops heading to the Gulf region, while wheat futures rose as the U.S. Great Plains growing area remained dry.

In other commodity trading, cocoa futures were mixed as the industry kept a close watch on peace talks between rebels and the government in top grower Ivory Coast. Steep falls in the stock market and dollar lured safe-haven investors to gold.

NYMEX oil futures were again buoyed by war fears, which countered the bearish sentiment sparked by news that tanker pilots on a strategic export route in No. 5 petroleum exporter Venezuela had ended their part in a nation-wide labor strike.

Venezuela, which normally supplies about 13 percent of the crude oil imported by the United States, has seen its exports hobbled by the strike led by foes of President Hugo Chavez who want the leftist leader to step down and call fresh elections.

Fears of a war with Iraq, which could disrupt the flow of oil from the world's eighth largest oil exporter, took center stage in the market. President George W. Bush said Tuesday it was "clear to me now" that Iraqi President Saddam Hussein was failing to comply with U.S. demands to disarm.

"He's delaying. He's deceiving. He's playing hide and seek with inspectors," Bush told reporters at the White House.

"Time is running out," he said, as the Pentagon ordered two more U.S. aircraft carriers and another 37,000 combat troops to deploy to the Gulf region for a possible war with Iraq.

Oil traders said Bush's remarks appeared to leave little doubt that Washington was close to authorizing the use of military force against Iraq, accused by the U.S. of concealing weapons of mass destruction. Baghdad denies the charge.

Mohamed ElBaradei, head of the U.N. nuclear watchdog agency, said that "quite a few months" were needed to complete the search for any Iraqi weapons of mass destruction.

NYMEX February crude oil ended 70 cents higher at $34.61 per barrel after hitting $35.20. February gasoline was down 1.01 cents at 90.10 cents per gallon, while February heating oil was off 0.39 cent at 89.47 cents a gallon.

CBOT wheat futures were higher, supported by concerns of possible crop damage sparked by persistent dry weather in the Great Plains growing region.

"It's the weather -- that and it's been beat up pretty bad lately," a trader said, referring to recent sharp falls in wheat futures to 6-1/2 month lows on bearish official stocks data.

Part of the strength in CBOT soft red winter wheat came from strong gains in Minneapolis spring wheat futures.

Last Friday, trade sources said industry consultant Sparks Cos. forecast that farmers will sow 14.772 million acres with spring wheat this year in the United States, down from 15.714 million in 2002.

Traders and analysts said farmers saw better financial returns from other crops such as barley and soybeans.

CBOT March wheat ended 2-1/2 cents higher at $3.19-1/4 per bushel. March corn rose 1-1/4 cents to $2.33-3/4, while March soybeans finished unchanged at $5.56 per bushel.

CSCE cocoa futures were mixed, with industry selling capping gains. The market remained focused on peace talks between rebels and the Ivory Coast government in Paris.

The negotiations continued this week at trying to bring a resolution to a bloody war since a failed coup Sept. 19. U.N. Secretary-General Kofi Annan plans to attend the Paris summit, a U.N. spokesman said.

Even as the talks were progressing, Ivory Coast's army said it had repulsed an attack by Liberia a day after Liberia said it had been attacked by Ivory Coast.

Liberians have been fighting on both sides of the four-month war in Ivory Coast.

CSCE March cocoa ended $4 higher at $2,155 per tonne. COMEX gold futures were higher as U.S. equities and the dollar slumped, and amid Bush's tough talk on Iraq.

"Gold is going to react to any type of announcement that can impact the Iraqi situation. The comments from Bush today are certainly inflammatory," said Jim Pogoda, a trader at Mitsubishi International Corp. in New York.

Gold is about 25 percent higher than a year ago, making it one of the best-performing financial assets. Last week COMEX futures hit a six-year high.

The dollar fell to its weakest level in more than three years against the euro on Tuesday on the Iraqi tension. The dollar's dip made gold more affordable to overseas buyers.

COMEX February gold ended 70 cents higher at $357.5 an ounce.