www.msnbc.com

LONDON, March 14 — OPEC powerhouse Saudi Arabia has snapped up 14 tankers to move 29.5 million barrels of crude oil to the U.S. Gulf for May delivery, brokers said on Friday.            THEY SAID THE bookings, to move 4.15 million tons, represent additional spot tanker bookings over and above normal demand and term contracts.        “It’s a huge volume, yes,” one shipping broker told Reuters.        The bookings made by Vela International Marine, state oil company Saudi Aramco’s chartering arm, indicate that its own large fleet is already fully employed.        Vela owns and operates one of the largest tanker fleets in the world, with 21 VLCC and ULCC-class tankers at its disposal.        Oil traders said the volume shows Riyadh will keep supplies running high into May after a sharp increase in recent months to fill shortages from OPEC producer Venezuela and allay supply disruption fears ahead of a possible second Gulf War.          World oil prices spiral downward

       Saudi Arabia has raised output by more than a million barrels per day (bpd) since the start of the year and is likely to average more than nine million bpd in March of its 10.5 million bpd capacity.        Brokers said 11 of the tankers booked to load between March 27 and April 18 had so far been confirmed. It takes between five and six weeks to reach the United States from the Gulf.        Some four other Very Large Crude Carriers representing some 1.12 million tons of crude, booked under oil tanker pool Tankers International, were on subjects and had still to be confirmed by the charterer, brokers said.        “This is the third consecutive month Vela has come in so strongly,” said Roy Mason of UK-based consultancy Oil Movements.        “It all fits with what we think we know about production changes,” he told Reuters.        Shipping brokers said the huge volume had undoubtedly helped freight rates from the Gulf balloon higher. Some routes are now trading at fresh two-year highs amid brisk business and a tightening tonnage list.        Freight for VLCC steaming from the Gulf to the U.S. rose 10 points from W120 to W130 brokers said.

www.boston.com By Reuters, 3/14/2003

NEW YORK - World oil prices plunged yesterday as wrangling at the United Nations further delayed a vote on a new resolution that could pave the way to war with Iraq.

US light crude dropped $1.82, or 4.8 percent, to $36.01 a barrel. London benchmark Brent crude oil slid $1.44 to $32.47 a barrel.

Oil prices are still up roughly 12 percent this year, underpinned by concerns that a war in Iraq, which itself ships around 4 percent of world oil exports, could upset supplies from other producers in the Middle East.

A report that Japan, Asia's largest oil consumer, plans to sell 300,000 barrels per day from its emergency petroleum reserves if US-led forces invade Iraq added to the day's slide, oil dealers said.

Prices slumped after the White House said diplomatic efforts to secure a consensus at the United Nations on a new resolution on Iraq could spill over into next week. US Secretary of State Colin Powell told a congressional committee there may be no vote at all on the resolution, widely seen as a war trigger - a sign that Washington fears it may not get enough support at the international body.

A German government source said that a compromise on an Iraq proposal was unlikely, even if a vote in the UN Security Council is put off until next week. France has threatened to veto any resolution that would call for military force, and China, Russia, and Germany have all expressed opposition.

Further relief for soaring prices came from an end to freezing US temperatures which have supported heating oil prices at near record levels in recent weeks.

Prices had jumped on Wednesday as a fall in US stocks combined with worries that oil cartel OPEC would not be able to compensate for lost Iraqi exports in event of war.

Latest US data showed crude inventories at a 27-year low. There were also sharp drops in gasoline inventories, which ought to be growing as stockbuilding starts for the summer driving season.

Analysts say core oil stocks are now 89 million barrels below normal. ''Given the reported ramping of OPEC production and the continued recovery of Venezuelan production, the shortfall is shocking,'' SG Securities said in a research note.

The Organization of the Petroleum Exporting Countries has stepped up output this year to cover an outage of crude from Venezuela, where an anti-government strike brought production to little more than a trickle in December and January.

Venezuela, normally the fifth-biggest exporter providing about 13 percent of U.S. oil imports, has increased shipments of crude and oil products though rebel oil workers say production is still less than half of normal levels.

Analysts say timing is now key for the war because oil demand is generally 2 million barrels lower in the second quarter of the year as spring advances and the loss of Iraqi crude would not be as acutely felt. The West's energy watchdog, the International Energy Agency, says the OPEC cartel likely lacks enough capacity to compensate immediately for the loss of Iraqi and Kuwaiti oil.

OPEC, however, has pledged to guarantee supplies should war break out and Saudi oil minister Ali al-Naimi reiterated yesterday OPEC's ability to deliver oil in case of war in Iraq.

Nihon Kezai Shibun reported yesterday that Japan will consider releasing oil with the United States, regardless of what the IEA advises. Japan and the United States are members of the 26-nation IEA, the energy watchdog for industrialized nations that is based in Paris.

The IEA has said that it will allow OPEC to try to cover any shortages in war before it considers, as a last resort, releasing inventories from emergency stockpiles held in consumer nations.

Those reserves, built after the 1974 Arab oil embargo, were last used in the 1990-91 Gulf War after Iraq's invasion of Kuwait.

reuters.com Fri March 14, 2003 02:18 AM ET

SINGAPORE (Reuters) - U.S. oil prices fell to a three-week low on Friday as the United States continued to try to garner U.N. support to use force to disarm Iraq, saying it might keep trying until next week or scrap a new resolution.

U.S. light crude fell to $35.32 a barrel, the lowest level since February 21. It later recovered to $35.80, 21 cents below the New York close on Thursday.

London's Brent crude dropped 40 cents to $32.03 a barrel, an 11-day low.

"In risk terms, I see another $1 or so of weakness, while I maintain around $12 potential upside risk," said Sydney-based independent oil analyst Simon Games-Thomas.

Volatile oil markets fell $1.50 to $2.00 a barrel on Thursday after the United States said diplomatic efforts to secure a consensus at the U.N. Security Council on a new resolution authorizing military force against Iraq could go into next week.

Bullish comments from U.S. officials earlier this week pointed to Washington forcing a vote at the Council by the weekend, potentially bringing the threat of war a step closer.

Crude had climbed some 30 percent this year to almost $40 a barrel and close to a record high at $41.15 struck in October 1990 in the build-up to the 1990-1991 Gulf War.

Traders worry that an invasion of Iraq, which itself ships around four percent of world oil exports, could upset supplies from other producers in the Middle East.

Secretary of State Colin Powell told a congressional committee there might be no vote at all on the resolution, widely seen as a war trigger -- a sign that Washington fears it might not get enough support at the international body.

Washington, backed by Spain and Britain, has met strong opposition from France and Russia, which have threatened to veto any vote at the Security Council that could lead to war.

WARMER WEATHER

Further relief for soaring prices came from an end to freezing U.S. temperatures that have supported heating oil prices at near record levels in recent weeks as fuel stocks in the world's biggest consumer have fallen to 27-year lows.

The Organization of the Petroleum Exporting Countries has cranked up output this year to cover an outage of crude from Venezuela, where an anti-government strike brought production to little more than a trickle in December and January.

Venezuela, normally the fifth-biggest exporter providing about 13 percent of U.S. oil imports, has increased shipments of crude and oil products though rebel oil workers say production is still less than half of normal levels.

Analysts say timing is now key for the war because oil demand is generally two million barrels per day (bpd) lower in the second quarter of the year as spring advances and the loss of roughly two million bpd of Iraqi crude would not be as acutely felt.

Boston-based Energy Security Analysis (ESAI) said it expected to see some strong signals from supply/demand fundamentals "even through the fog of war."

"Indeed, ESAI projections are beginning to indicate a sizeable crude oil surplus even with a forecasted reduction in Iraqi output," ESAI managing director Sarah Emerson said.

"The increase in Saudi output coupled with recovering Venezuelan output has inflated OPEC output just as European refinery maintenance is getting underway and just before Asian crude oil purchasing will drop off seasonally," ESAI said.

OPEC has pledged to guarantee supplies should war break out and Saudi Oil Minister Ali al-Naimi reiterated on Thursday OPEC's ability to deliver oil in case of war in Iraq.

OPEC wants to avoid any repeat of the 1991 Gulf War when industrialized nations released emergency oil stocks timed to coincide with the start of the allied bombing campaign against Iraq, which caused crude to plunge $10 in a single day.

The International Energy Agency, the West's energy watchdog, has said that it would allow OPEC to try to cover any shortages in war before it considers, as a last resort, releasing inventories from emergency stockpiles held in consumer nations.

www.channelnewsasia.com First created : 14 March 2003 0831 hrs (SST) 0031 hrs (GMT) Last modified : 14 March 2003 0831 hrs (SST) 0031 hrs (GMT)

World oil prices slumped on Thursday as the twisted road to war in Iraq appeared to lengthen, warm weather approached and Venezuela pumped more crude.

In New York, the reference light sweet crude contract for April delivery skidded US$1.82 to US$36.01 a barrel.Advertisement

In London, the price of Brent North Sea crude oil for April delivery slid US$1.44 to US$32.47 a barrel.

Traders said wrangling at the United Nations had further delayed a vote on a new resolution that could pave the way to war with Iraq.

They added that US President George W Bush had run in a diplomatic tangle in the UN Security Council.

The US, looking for a way around French, Russian or Chinese vetoes, said it could allow a UN Security Council vote on war against Iraq to slip into next week or even forgo the vote altogether.

Expectations of lower fuel demand as spring approached in the northern hemisphere also weighed on prices.

News that Venezuela had recovered from strike action to push production up to 2.95 million barrels a day depressed prices.

On Tuesday, oil ministers of members of the Organisation of Petroleum Exporting Countries agreed to maintain current production quotas but pledged to avert shortfalls in the event of war.

www.dailytimes.com.pk

SINGAPORE: Oil prices held strong on Thursday after the US government reported a decline in fuel stocks, leaving only a thin supply cushion to cover US needs if war should break out in Iraq. US light crude dipped five cents to $37.78 a barrel, just $3.37 below a record high of $41.15 set during the 1990-91 Gulf crisis. London’s Brent crude lost six cents to $33.85 a barrel. Latest data from the US Energy Information Administration (EIA) underpinned concerns over a possible supply crunch in the world’s biggest oil consumer, as Washington remains poised to launch an invasion of Iraq, the eighth-largest crude exporter. The EIA reported US crude inventories falling almost four million barrels to 269.8 million, below the government’s suggested level for smooth operations and matching a 27-year record low hit in early February. “Given the reported ramping of OPEC production and the continued recovery of Venezuelan production, the shortfall is shocking,” SG Securities said in a note. The Organisation of the Petroleum Exporting Countries has stepped up output this year to cover an outage of crude from Venezuela, where an anti-government strike brought production to little more than a trickle at one point. Venezuela, normally the fifth-biggest exporter providing about 13 percent of US oil imports, has increased shipments of crude and oil products as the two-month strike to topple President Hugo Chavez has crumbled. Rebel oil workers pegged oil exports at 1.14 million barrels per day (bpd) in early March, still well below the 2.7 million bpd it shipped before the strike began in early December. Crude has risen 20 percent this year on concerns that a war in Iraq could upset oil supplies from the Middle East. With about 300,000 U.S. and British troops in the Gulf region, US officials said Iraqi President Saddam Hussein had “days, not weeks” to prove he had complied with UN demands for Baghdad to give up all weapons of mass destruction. OPEC, which controls 60 percent of world crude exports, pledged earlier this week to ensure adequate supplies should war break out. But the International Energy Agency, adviser on energy to 26 industrialised nations, said in its monthly oil market report on Wednesday that OPEC’s spare production capacity had been squeezed to 900,000 bpd following the recent output increases. “This is less than the potential loss of supply in the event of war in Iraq,” said the Paris-based IEA. Iraqi output, running at 1.7 million bpd over the past month, would be expected to be halted in the event of war. In addition, Kuwait has said it might need to suspend as much as 700,000 bpd as a precaution. “The market is heading into a period of heightened uncertainty with low stocks and limited spare production and shipping capacity. A further supply disruption would tax a system operating at close to capacity,” the IEA said. —Reuters