Reuters, 04.03.03, 1:08 PM ET NEW YORK (Reuters) - NYMEX crude oil futures slipped off session peaks Thursday afternoon as players took some profits amid news that U.S.-led forces were pushing closer to Baghdad. Crude's movement was partly influenced by some selling on gasoline futures, which surged earlier following heavy losses on Wednesday, traders said. "The longs stuck with their positions for a while. But right now, with gasoline giving up some gains, those people are taking some profits on crude also," said a NYMEX floor trader. At 1255 EST (1755 GMT), NYMEX May crude was up 24 cents at $28.80 a barrel, trading $28.30 to $29.24. In London, May Brent crude traded at $25.51 a barrel, up 30 cents, below its session high of $25.87. NYMEX May gasoline was up 0.46 cent at 86.85 cents a gallon, below its session high of 88.25 cents. The morning low was 86.10 cents. Traders expect the market's general decline to persist as optimism is growing that the war with Iraq would end quicker than earlier speculated. U.S. armored units moved on Thursday to about 10 km (six miles) from the edge of Baghdad and planes hit targets in and around the Iraqi capital in preparation for an assault on the airport. Parts of four elite Iraqi Republican Guard divisions were moving south, U.S. officers said, setting up a potential showdown for the capital. But U.S. and British political and military leaders said urban warfare in Baghdad could be prolonged and bloody and refused to be drawn on when they might authorize a final push to capture the city of five million people. The day's gains are being limited by data showing a big rise in U.S. crude supplies last week. Surging imports from Saudi Arabia lifted U.S. crude inventories nearly 7 million barrels to 280.7 million barrels, in the week to last Friday, government data showed on Wednesday. Growing deliveries from Venezuela, which was crippled by a two-month strike that began in December, also added to last week's inventory build. U.S. Energy Secretary Spencer Abraham said Thursday the rise in inventories was a "positive sign" of adequate supply. He said there was no need to use the U.S. Strategic Petroleum Reserve due to the Iraq and Nigeria disruptions, because they won't cause a "severe" interruption. OPEC-member Nigeria's internal ethnic unrest that continues to disrupt almost 40 percent of the country's 2.2 million bpd crude oil output remains supportive, traders said. "We look for nearby futures to settle into the 27.50-29.50 range into next week," said Jim Ritterbusch of Ritterbusch & Associates in a research note. "A renewed push back to above the $30.00 area is still possible but will require an extended loss of Nigerian output." NYMEX May heating oil futures were 0.89 cents higher at 72.75 cents a gallon, trading 71.30 to 73.70 cents.

<a href=news.ft.com>Financial Times By Carola Hoyos, Energy Correspondent Published: April 3 2003 18:52 | Last Updated: April 3 2003 18:52

As Baghdad looms larger in the sights of US and British soldiers, the nightmare of oil at $50 or even $100 a barrel is fading.

Although oil prices will remain vulnerable as the battle for Baghdad begins, they are a long way from their March high of $39.99 a barrel.

And as long as most of Iraq's oil wells remain intact, analysts say, there is little chance that prices will reach the $41.15 peak prices hit after Iraq invaded Kuwait in 1990.

Two main factors explain why this war with Iraq has had far less impact on oil prices than the last: timing and the fact that Saddam Hussein has not managed to wreak havoc in the oilfields as he did in 1991.

Then his troops damaged 700 Kuwaiti oil wells, leaving the emirate to spend two years rehabilitating its oil sector before it could return to full production.

Since the beginning of the current conflict, the world has lost 2.4m barrels a day of Iraqi production, which has been made up by Saudi Arabia and other Opec members, who increased their output quota to 24.5m barrels a day in January and then suspended restrictions altogether at the start of the conflict.

Spencer Abraham, US energy secretary, on Thursday confirmed Opec's key role, saying: "We've seen a substantial increase in Opec-10 production, more than enough to compensate for losses in Iraq and Nigeria."

But perhaps the most important factor was the timing of President George W. Bush's decision to launch his campaign, at a time when Venezuela's exports were recovering from the interruption in December and January caused by the country's national strike.

March also brought the first signs of spring to the northern hemisphere and a reduction in the level of oil required for winter heating.

This helped offset the loss of Iraq's oil and some of Nigeria's production, which was halted by ethnic violence ahead of this month's elections.

Oil refiners have even begun to rebuild their stocks, which earlier this year had fallen to levels not seen since the mid-1970s.

Meanwhile, the governments of US, Japan, Germany and South Korea were able hold on to their strategic stockpiles of oil which they were ready to release in the event of a serious interruption in supplies.

However, the uncertainty over the conflict in Iraq and the loss of Venezuela's exports have left their mark.

UK benchmark Brent crude oil prices averaged $31.47 a barrel during the first quarter of this year, $5 more than the fourth quarter of 2002 and $10 more than a year ago, according to BP's latest trading statement.

The jump in the price of WTI, the US benchmark crude, was even more dramatic. It averaged $34 a barrel, from $28.31 at the end of 2002 and more than $12 above prices a year ago.

News24.com 03/04/2003 16:39  - (SA)  

Johannesburg - Data published on Thursday showed that there was a 42.097c per litre (c/l) over-recovery in the petrol price in South Africa on April 2, the first day of the April retail petrol price.

The 178.586 c/l basic petrol price was the lowest in 15 months as the last time it was this low was on January 25 2002, when it was 175.5272 c/l.

The retail petrol price is adjusted every month on the first Wednesday of the month in accordance with the previous averaging period's over- or under-recovery.

The April averaging period was for the period February 26 to March 25 and resulted in an average over-recovery of 7.992 c/l. This however did not result in a retail price drop of similar magnitude, as the government imposed various additional taxes at the beginning of its fiscal year, which is April 1. Consequently the retail petrol price rose by 5c/l instead of declining by 8c/l.

No more additional taxes are due this fiscal year, but there could be increases in the margin given to retailers or wholesalers. If there are no additional levies, then South African consumers could be looking at a 40c/l (or more) drop in the retail petrol price on May 7.

The value of the Organisation of Petroleum Exporting Countries' (Opec) basket of seven crude oils averaged $25.76 a barrel on April 2, a 22.2% decline since the recent peak of $33.11 reached on March 10.

Set in 1986, the basket is based on the average prices of Algerian Saharan Blend, Indonesian Minas, Nigerian Bonny Light, Saudi Arabian Arab Light, Dubai Fateh, Venezuelan Tia Juana Light and Mexican Isthmus crude oils.

Major oil producer Saudi Arabia has boosted its crude production in early April to 9.6 million barrels per day (bpd), 100 000 bpd higher than its March average of 9.5 million bpd and more than 1.6 million bpd in excess of its 7.963 million bpd Opec quota, according to the US Energy Information Administration (EIA).

The EIA's March estimate of Saudi production was 700 000 bpd higher than its February estimate. The EIA has updated its estimates of Opec countries' production on a daily basis since the early days of the US-led war on Iraq, which started on March 20.

The EIA attributed the recent record US import levels for the week to March 28 to a sharp increase in supplies from Saudi Arabia and higher volumes from Nigeria and Venezuela.

The higher level of imports helped boost US commercial crude inventories to above 280 million barrels for the first time since mid-December 2002.

The EIA estimated total Opec production for March at 27.6 million bpd compared with 27.05 million bpd in February.

The March total includes Iraqi production at 1.35 million bpd compared with 2.49 million bpd in February.

Excluding Iraq, the ten Opec members with quotas pumped an average of 26.3 million bpd compared with their February production of 24.57 million bpd and 1.8 million bpd more than their 24.5 million bpd output ceiling, the EIA said.

Apart from Saudi Arabia, the biggest jump in production came from Venezuela, which the EIA reckoned boosted output by 900 000 bpd to 2.3 million bpd in March as the Venezuelan oil industry continued to recover after a strike that began in early December. The EIA estimates that Venezuela is currently producing 2.5 million bpd.

<a href=www.middle-east-online.com>Middle East online

Royal Institute of International Affairs argues Venezuela's oil more important to America's oil security than Iraq's.

LONDON - The United States did not launch the war in Iraq to control Baghdad's oil supplies, an influential British research institute said on Wednesday, rejecting suggestions that oil was the prime motivation for Washington's drive to topple President Saddam Hussein.

"The present US-led military campaign against Iraq is not a war for Iraq's oil," the Royal Institute of International Affairs (RIIA) said in a study on Iraq's oil.

Analysts at the RIIA said that even with sustained investment over several years, Iraq's total oil production could only ever be raised to six percent of the world's total, three times less than Saudi Arabia's total production potential and half the size of Russia's.

The institute also rejected the idea that ensuring a cheap and secure flow of oil to markets was the prime driver behind the US action, noting that Washington did not intervene to stop strikes earlier in this year in Venezuela, which drastically slowed down Caracas' oil production.

"Arithmetically, Venezuela's oil is more important to America's oil security than Iraq's, taking up a share of 14 percent of imports against Iraq's seven percent," it said.

The authors of the study, Valerie Marcel and John Mitchell, went on to dismiss concerns that the United States will allow its own oil giants to carve up Iraq's oil fields for themselves after the war.

"American companies have voiced their preferences in Washington, but so far, American foreign policy has not done very much for the oil majors.

"US sanctions against Iran and Libya have barred access of American companies to those markets, while European and other countries have had a freer hand to invest in these oil rich countries," it noted.

By contrast, the first Gulf War of 1990-1991 - prompted by Saddam Hussein's invasion of Kuwait - was largely a war about controlling oil supplies, the RIIA said.

"By invading Kuwait, Iraq controlled the production of 5 million barrels of oil a day, doubling its reserves. Iraq's own oil is much less important," the analysts said.

Many opponents of the US-led invasion of Iraq have accused Washington of launching the war in the hope of benefiting from a lucrative new source of oil supplies.

The Mercury News

Venezuela's state oil company said it dismissed about 900 more employees, raising the total to more than 18,000 since an oil strike began four months ago.

Those let go worked in all of Petroleos de Venezuela's units, a spokesman said. The firings occur two weeks after Energy and Mines Minister Rafael Ramirez said that dismissals were slowing. Petroleos de Venezuela had 33,000 employees before the strike began Dec. 2.

Labor unions, business leaders and former oil executives organized the national work stoppage to pressure President Hugo Chavez to step down and hold elections.