<a href=www.newsday.com>NewsDay.com By Randi F. Marshall STAFF WRITER April 3, 2003

As crude oil prices continued to fall yesterday on hopes that the war in Iraq may be near an end, area heating oil dealers, gasoline retailers and consumers were hoping they would reap the benefits.

Already, home heating oil retail prices have fallen from peak levels of the past three months. While gasoline prices have remained relatively stable recently, experts say they, too, will eventually respond to the crude oil declines.

To be sure, the usual seasonal factors play a role in the drop. "Everybody's consumption is cutting down," said Thomas Ortmuller, owner of Franklin Petroleum in Oceanside. "The prices are going to be less and less as we get into the summer months. It's just basic economics."

Turmoil in Iraq, Venezuela and Nigeria added to pricing pressure on oil during the winter. "Everything that could go wrong went wrong," said Kevin Rooney, chief executive of the Oil Heat Institute of Long Island.

But now, some experts say those troubles are resolving themselves just as people need less fuel. Said Rooney: "It's like, 'Boy, why couldn't this have happened back in January?' We all would have saved a lot of money."

Crude oil for May fell $1.22 to $28.56 a barrel on the New York Mercantile Exchange yesterday. Prices have dropped by more than $10 from their peak levels of late February and early March.

Heating oil wholesale prices dropped by 18 cents since the beginning of March, and are likely to keep falling, according to Rooney. Retail prices fell by roughly 11 cents in the last two weeks, he added.

Hawkins Cove Oil Supply Corp. in Glen Cove, for example, is now charging roughly $1.709 per gallon, compared with nearly $1.80 at its peak in March, according to owner George Hawkins.

By contrast, gasoline prices remain near their highs at $1.779 per gallon for regular self-serve gasoline on Long Island, and $1.829 per gallon of regular, self-serve in Queens.

As the months grow warmer, more home heating oil dealers buy most of their oil on an as-needed basis rather than through long-term contracts at fixed cost, so prices fluctuate along with the worldwide market. Franklin Petroleum, Hawkins Cove and other small, family-owned businesses purchase much of their supply daily, from large firms such as ExxonMobil and ConocoPhilips.

Reuters Thursday April 3, 2:18 pm ET

NEW YORK (Reuters) - Oil prices on Thursday bounced back from heavy recent falls as the sustained loss of crude supply from Iraq and Nigeria threatened to cap a rebound in U.S. oil inventories.

U.S. crude futures were 52 cents up at $29.08, while benchmark Brent crude oil in London rose 33 cents to $25.54 per barrel. U.S. crude has fallen by more than $10, or 27 percent from a 12-year high hit in late February.

ADVERTISEMENTPrices have dropped by four percent this week alone, weighed down by a big jump in U.S. crude stocks as Saudi Arabia's drive to lift oil production pushed U.S. imports to record levels.

The fatter inventory cushion has yet to allay fears that supply losses from Nigeria and Iraq, both normally among the top six oil importers to the United States, will keep U.S. supplies tight for months to come.

"It is by no means clear that imports can be maintained...once the cushion of extra oil in the supply chain over the next few weeks begins to abate," said Paul Horsnell, analyst at investment bank J.P.Morgan.

Iraq's exports have been at a standstill since the early days of the U.S.-led attack. Nigeria has seen its output slashed by 40 percent by unrest in the delta region ahead of elections later in April.

The impact has yet to be felt in the United States because oil takes weeks to arrive in tankers. Nigeria's oil is particularly important to U.S. refiners in summer as it is good for making gasoline.

"We still believe that the U.S. market will have difficulty in avoiding a significant gasoline price spike this summer," Horsnell added.

OPEC (News - Websites)INCREASE

The OPEC producer cartel has eased supply concerns by pumping eight percent more than its self-imposed supply ceiling in March, a Reuters survey showed.

Key U.S. ally Saudi Arabia, home to the world's biggest oil reserves and output capacity, pumped at its highest level in 21 years. Analysts say that recent price falls may soon encourage to reverse some production increases.

Renewed signs of U.S. economic weakness, which may in turn weaken demand growth, have also helped ease supply fears.

The number of new U.S. jobless claims last week jumped to its highest in nearly a year, the government said on Thursday, offering little hope for a turnaround in a grim labor market.

The jump in jobless claims has coupled with data this week showing a pull-back in the vast services sector, contraction in manufacturing and a hefty drop in factory orders to reveal a bleak picture of the U.S. economy.

Growth in U.S. gasoline demand, which soaks up nearly 12 percent of the world's oil supply, has already ground to a halt in recent weeks as record high pump prices keep drivers off the roads.

U.S. gasoline demand over the last four weeks was 0.1 percent below last year, according to a government report on Wednesday. Demand was routinely 2-4 percent above 2002 levels at the start of this year.

The Leader Online By Barney Burke Leader Staff Writer

The price of gasoline has edged past the $2 mark in Jefferson County. But gasoline doesn't cost nearly as much as many other everyday products. Photo by Barney Burke.

Petrol is cheaper than milk, soda pop, other items on store shelves

While motorists grumble about alleged price-gouging by oil companies or blame the war in Iraq or the strike in Venezuela, it's worth looking at how gasoline stacks up to other common products.

Not only are a lot of other liquids more expensive, but they won't move your car an inch.

Why is it that orange juice costs three times as much as a gallon of premium petrol? One can guess that the $5.99 cost of a gallon of OJ might reflect long-distance delivery. Look at the label on a one-gallon bottle of Minute Maid, for example, and there's a disclosure that the product comes from Brazil as well as the United States.

At $7.99 a gallon, four times the price of gas, buying a 12-pack of Budweiser beer can seem like a pretty spendy decision compared to gasoline. But the big-ticket beverage without a doubt is coffee. An 8-ounce cuppa joe at Starbucks in Port Townsend will set you back $1.30 - which translates out to a whopping $20.80 per gallon.

Another product that you can't put in your tank is latex interior paint. A gallon of flat latex goes for about five times the price of gas, and that $9.97 only gets one to two rooms per gallon, in this reporter's experience.

And then we have the one-gallon container of professional grade Roundup weed killer, which can be had for $99.95 a gallon in Chimacum, 50 times the price of high-test fuel. It isn't clear just how long that amount would last the average gardener, or how long it would take to remove it from your garden if you accidentally spill it.

But as anyone who wears hard contact lenses can tell you, the most expensive liquid known to mankind may in fact be the popular Boston brand lens cleaner, which comes in a one-ounce bottle for $8.79. At a remarkable $1,125.12 per gallon, a gallon of Boston costs as much as 562 gallons of premium gas, nearly as much as Lasik surgery for both eyes.

At the bargain end of the scale is municipal tap water. In the City of Port Townsend, residents can drink up the bounty of the Big Quilcene and Little Quilcene rivers for a modest 0.18 cents per gallon, and Tri-Area residents pay 0.25 cents a gallon for water from the Jefferson County Public Utility District 1 (PUD), or about 1,000 times cheaper than bottled water. The city and PUD charge base fees of $13.99 and $20 a month, respectively, in addition to volume charges.

By comparison, bottled water seems exorbitant. At local grocery stores, a gallon jug of generic bottled water goes for $1.90, nearly the price of a gallon of premium gas.

Gasoline is going for about the same price as home heating oil, $1.92, which in essence is diesel fuel, conveniently delivered to your door. Propane, also popular for home heating, is running about $1.55 a gallon depending on the customer's tank size and who owns it, according to local suppliers. The price of propane is expected to drop about five cents soon, one dealer said. His answer was as cryptic as the common answer from gas station owners: His suppliers simply informed him that the price is going down.

Among the most expensive petroleum-based products available locally is Marvel Mystery Oil, familiar to many old-time motorheads. Like something out of the J.C. Whitney "home of chrome" catalog, pouring the stuff into your gas tank with every fill-up is said to have many benefits for your car. But at $14.95 a gallon, the modern consumer may find the brand name lacking in scientific panache.

<a href=quote.bloomberg.com>Bloomberg.com By Mark Shenk

New York, April 2 (Bloomberg) -- Crude oil fell on expectations the war in Iraq is moving closer to an end, after the U.S. said coalition forces advancing toward Baghdad destroyed a division of Saddam Hussein's Republican Guard.

Fourteen days of fighting haven't slowed shipments from neighboring Saudi Arabia, the world's top exporter, said Lamees al- Ali, a spokeswoman at state-owned Saudi Aramco. Kuwait and Qatar also said shipments are normal. Persian Gulf countries pump about a quarter of the world's oil. Price declines accelerated after the U.S. said oil imports rose to a record last week.

Traders are betting that the war will be over in a matter of a couple of weeks, with Iraqi exports back to normal in about three months,'' said Phil Flynn, a senior energy trader at Alaron Trading Corp. in Chicago. We've heard that there are people working on the southern fields now, so it could be even sooner.''

Crude oil for May delivery was down $1.28, or 4.3 percent, at $28.50 a barrel as of 11:48 a.m. on the New York Mercantile Exchange. Easing concern of disruptions to Persian Gulf exports has sent prices down 28 percent from a 12-year high of $39.99 a barrel reached on Feb. 27. The 1991 Gulf War lasted six weeks.

In London, the May Brent crude-oil futures contract was down $1.04, or 4 percent, at $25.32 a barrel on the International Petroleum Exchange.

The Energy Department in a weekly report said U.S. inventories rose a greater-than-expected 6.8 million barrels, or 2.5 percent, to 280.7 million barrels in the week ended March 28. A Bloomberg survey of analysts predicted an increase of about 2 million barrels.

Record Imports

U.S. crude-oil imports were the highest recorded by the Energy Department since it began compiling weekly figures in 1990, said Doug MacIntyre, a senior oil market analyst with the department's Energy Information Administration.

Imports rose 7.3 percent to 10.36 million barrels a day. Venezuelan shipments were close to normal, the department said. A strike that began Dec. 2 had disrupted exports from the South American country, which in November provided about 10 percent of the oil used by U.S. refineries.

Saudi Arabia and Venezuela ``said they were increasing production and we are now seeing it reflected in inventories,'' said Jay Saunders, an analyst at Deutsche Bank Securities in New York.

Iraq, the third-largest producer in the Persian Gulf region, pumped about 3 percent of global supply in February, before the war started. The nation shipped about 7 percent of the oil imported by the U.S. in January.

Baghdad Guard Division

The Republican Guard's Baghdad Division is no longer able to operate as a fighting force, U.S. Army Brigadier General Vincent Brooks said, without providing details, during a televised briefing at the U.S. Central Command's Qatar headquarters.

Two other divisions, each numbering about 12,000 men at full strength, are under ``serious attack'' near Karbala, 50 miles southwest of the capital, he said.

In Nigeria, international oil companies have halted production of about 800,000 barrels a day in the past two weeks, or more than a third of the country's output, because of fighting between government troops and ethnic Ijaw militants before presidential elections on April 19. Last Updated: April 2, 2003 12:10 EST

Press Release Source: InvestorCanada.com

Today on InvestorCanada.com... A potential oil crisis in America? Wednesday April 2, 7:32 am ET

TORONTO, April 2 /PRNewswire/ - Oil production in Venezuela is only about 35% of its normal level, Saudi Arabia is maxed out, and demand for oil is poised to increase as the driving season kicks into high gear; all these factors could contribute to an oil crisis in America in the short term according to Bill Wood, President of Sovereign Chief Ventures.

On today's edition of www.InvestorCanada.com host Donna Guzik speaks to Wood about the state of the oil market. Wood says we can't rely on OPEC to produce enough oil to cover any shortfalls. He says, "Even though OPEC has promised that they would, we also know that presently, they are producing at max. The question is if our demand gets much higher, who's going to supply the difference?"

InvestorCanada.com offers daily, independent in-depth interviews with financial newsmakers and leading business thinkers to provide investors with the perspective they need to make informed financial decisions. Interviews can be heard on real audio format, with complete transcripts available. Sign up for the free subscription service that offers 8 daily market updates, and a daily newsletter. InvestorCanada.com is a division of Canada NewsWire.