news.bbc.co.uk

Nigeria is the world's seventh biggest oil exporter

Nigerian oil workers have called off a six day strike after talks with the government.

But oil workers in Venezuela are planning fresh protests following the arrest of a strike leader.

Nigeria's oil strike has not affected exports as replacement staff have been used to load supplies.

But the government feared a long-running strike would damage the country's economy.

Oil exports account for more than 80% of Nigerian government revenue and more than 90% of foreign exchange earnings.

Venezuela

Nigeria's Department of Petroleum Resources said it had thrashed out a deal in Lagos with member of the senior staff union, Pengassan.

Pengassan staff walked out on Saturday in support of demands including greater autonomy, higher pay, and payment of allowances arrears, some dating back to 2000.

The union's national secretary-general Kenneth Narebor said: "We have finished and worked on a communique which has been signed and we have agreed to suspend the action."

Meanwhile, Venezualan oil workers said they planned to picket the offices and installations of state oil firm PDVSA.

The workers - 12,000 of whom were sacked by the country's president Hugo Chavez - were not planning to occupy oil installations, they said.

But the protests are expected to take on an added momentum after the arrest of business chief and opposition leader Carlos Fernandez.

Heavily-armed police grabbed him and bundled him into a car, at a restaurant in Caracas.

Venezuela was brought to its knees by a two month long strike, aimed at ousting President Chavez.

cbs.marketwatch.com By Myra P. Saefong, CBS.MarketWatch.com Last Update: 3:37 PM ET Feb. 20, 2003

NEW YORK (CBS.MW) -- Crude prices declined Thursday, breaking a six-session rise on the back of mixed data on U.S. crude stocks and the expiration of the March crude contracts.

"Selling begets selling and nobody wants to be the last man standing especially at these 'nosebleed' levels," said John Person, head analyst at Infinity Brokerage Services.

On the New York Mercantile Exchange, crude for March delivery closed lower by 37 cents at $36.79 a barrel.

Earlier, the benchmark contract briefly touched $37.55 -- a level not seen since spot prices topped out at $37.89 in September 2000. It gained $2.68 per barrel between Feb. 10 and Feb. 19.

April crude, which became the lead-month contract at the session's close, slipped by 92 cents to close at $34.74 per barrel.

Also on Nymex, gold futures prices closed higher at $353.10 an ounce amid a weaker U.S. dollar and growing global tensions. See Metals Stocks.

Analysts blamed the oil price pull back on the expiration of the March crude contracts as well as confusing data from two key sources.

"After the mixed data traders are dazed and confused -- the DOE says crude stockpile rose while the API says they fell," said Kevin Kerr, analyst at Weiss Research in Palm Beach Gardens, Fla. "Traders don't know what to believe with skewed data like this."

Early Thursday, the Energy Department said the nation's inventories of crude oil rose by 3.1 million barrels in the week ended Feb. 14 compared to the prior week. But the American Petroleum Institute reported a 3.3 million-barrel decline in crude stocks.

Aggregate crude stocks stood at 272.9 million and 268.3 million barrels, according to the Energy Department and API, respectively.

On a year-over-year basis, however, crude inventories are down more than 15 percent, the equivalent of 50.4 million barrels, the government report said, amid tight import supplies brought on by Venezuela's general strike and war tensions in the Middle East.

"Crude-oil inventories remain critically low, just slightly above the lower operational inventory level of 270 million barrels," said Thorsten Fischer, an economist at Economy.com, referring to the government data. That's the minimum level required to keep refineries running normally.

Last week, the Energy Department reported its lowest level for inventories in 27 years -- just under 270 million barrels.

"Supplies are still tight and the concern is there will be a continued imbalance between an immediate replenishment of stockpiles and demand," said Infinity Brokerage's Person, adding: "there does not look like there is an immediate solution and tensions are on the rise in Venezuela and in the Middle East."

The latest data came as a surprise to some industry analysts. Fimat USA had been looking for inventories to rise by 1.75 million barrels, while IFR Pegasus had expected crude stocks to fall by 1 million to 3 million barrels.

Starting Wednesday, the API and Energy Department will release their weekly data on petroleum supplies at 10:30 a.m. Eastern time, an hour and a half later than previously scheduled so traders will be able to see the reports during the trading session.

$40 oil still possible

Some analysts were still optimistic that the tight inventory situation could take prices to highs not seen since the Gulf War in the early 1990s.

Oil prices could soon hit $40 a barrel, said John Vail, an analyst at Mizuho Securities USA, based in Chicago, with a stockpiling trend taking part of the blame.

"China's crude imports are rising rapidly as they plan a significant strategic petroleum reserve," he said, adding that the country's imports were up 77 percent in January, representing an additional 880,000 barrels per day of crude demand.

"As with many commodities, war fear inventory build is a major factor," Vail said.

And as war becomes more likely, "crude oil prices have started a rally, which will continue and even accelerate during the run-up to military action," said Economy.com's Fischer. See Countdown to War.

On the other hand, if investors assume that war with Iraq is closer, this could lead to some speculation that oil prices "could settle back down as OPEC promised to 'open the spickets' in case military action occurred," said Person.

In other energy news Thursday, Nigerian oil workers met with government officials in a bid to end a strike that began Saturday. Production and exports haven't yet been affected.

In Venezuela, a country still suffering from a labor strike that began Dec. 2, opposition leaders threatened to call a new strike in response to the arrest of strike co-leader Carlos Fernandez. The general labor strike ended this month, except in the oil sector.

Oil product supplies fall

The API and Energy Department also reported declines in inventories of petroleum-product stocks for last week.

Distillate inventories declined by 3.2 million to total 107 million barrels, while gasoline supplies fell by 1.8 million to 210.7 million barrels, the API said.

The Energy Department posted a 4.6 million-barrel fall for distillates to total 103.6 million barrels. And gasoline stocks fell by 1.4 million barrels to 211.2 million barrels in the latest week.

The distillate results reflect "high demand caused by severe winter weather and cold temperatures, especially in the Northeast," said Fischer.

IFR Pegasus had forecast drawdowns of 2 million to 4 million barrels in distillates and of 1 million to 3 million barrels in gasoline supplies. Fimat had been on the lookout for distillates falling by 4 million barrels but gasoline stocks increasing by 2 million barrels.

Following the supply update, March gasoline eased back by 3.64 cents to 96.58 cents a gallon. The March contract for heating oil fell 4.06 cents to $1.0587 per gallon.

Meanwhile, refinery utilization rose by 2.2 percent to 87.8 percent of capacity, the API reported, while the Energy Department said utilization rose by 2.3 percent to 88.8 percent.

Supply data finally lifts natural gas

In other energy trading, natural-gas futures closed higher, finally finding support from the larger-than-expected decline in supplies.

On Nymex, March natural gas closed at $6.162 per million British thermal units, up 2.8 cents after trading mostly flat during the session. It touched an intraday high at $6.25, a level last seen in February 2001, when prices reached $7.10 per million British thermal units.

The contract gained nearly 4 percent in Wednesday's action.

Also Thursday, the Energy Department reported a 203 billion cubic fall in inventories as of Feb. 14.

By two key measures, total inventories of 1.168 trillion cubic feet are significantly lower -- 868 billion cubic feet less than the year-ago level and 436 billion cubic feet below the five-year average, the government said.

Fimat expected a contraction of 168 billion cubic feet, while IFR Pegasus was looking for a decrease of 150 billion to 170 billion cubic feet. A year earlier, stocks contracted by 124 billion cubic feet.

In the equities arena, most oil-service shares traded higher. The Philadelphia Oil Service Index ($OSX: news, chart, profile) rose more than 1 percent. See Energy Stocks.

The Reuters/CRB Index, a broad-based measure of the commodity futures market, closed at 246.5, down 0.6 percent. Myra P. Saefong is a reporter for CBS.MarketWatch.com in San Francisco

reuters.com Thu February 20, 2003 05:33 AM ET

LONDON (Reuters) - Oil prices simmered near the highest levels for more than two years Thursday, ahead of data expected to show further declines in U.S. fuel stocks as the United States gears up for a possible war on oil-rich Iraq.

U.S. light crude CLc1 slipped two cents to $37.14 a barrel, just below a high at $37.45 struck Wednesday, which marked the highest level since September 2000 when soaring oil markets prompted the U.S. government to release emergency reserves.

Crude is only $4 below an all-time peak at $41.15 posted in the build up to the Gulf War in 1990.

In London, benchmark Brent crude was trading 16 cents lower at $32.17 a barrel, off a 26-month-high of $33.10 touched last week.

Apart from the threat of an attack on Iraq, prices have been driven by continued disruptions to oil exports from strike-bound Venezuela and possible interruptions to crude flows from Nigeria as oil workers down tools in a dispute over pay and conditions.

Before its general strike, Venezuela was fifth in world oil exporter rankings, while Nigeria is seventh and Iraq eighth.

"Until the situations in Iraq and Venezuela are clarified, oil prices are going to stay high and getting inventories rebuilt is not going to be easy," said Adam Sieminski, analyst at Deutsche Bank.

The Energy Information Administration (EIA) is to release its weekly U.S. fuel supply assessment Thursday, a day later than usual following a U.S. public holiday earlier this week.

The EIA figures are considered a barometer for the demand and supply balance in the world's biggest oil consumer.

Figures last week showed U.S. crude stocks running at the lowest levels since the mid-1970s at just below 270 million barrels, the minimum needed to keep U.S. refineries operating.

A blast of Arctic weather has pumped up demand for heating fuel in the United States, where fuel supplies were already running down following the anti-government strike in Venezuela, which crippled the domestic oil industry and all but cut off some 13 percent of U.S. oil imports.

Analysts forecast this week's EIA report would show further declines, with crude seen off by one million barrels and distillates, which include key heating oil, falling by three million barrels.

OPEC PLEDGES STABLE SUPPLIES

Striking state oil workers said Wednesday that Venezuelan crude production was at 1.4 million barrels per day, although the government pegged output closer to two million bpd.

Before the strike began on December 2, production was a little over three million bpd.

Exports from Nigeria, Africa's biggest producer, appeared not to have been affected so far by a strike by senior oil workers, who began their dispute Saturday.

Talks to resolve the dispute were scheduled for Thursday, postponed from a day earlier to allow union leaders to travel to Abuja.

Nigeria and Iraq export roughly two million bpd each and, along with Venezuela, are members of the Organization of the Petroleum Exporting Countries.

OPEC has pledged to maintain stable supplies to the global market of 76 million bpd even in the event of war.

A Gulf source said Wednesday that Saudi Arabia, the world's biggest exporter, would support a temporary suspension of the cartel's official output limits if an attack halted overseas sales from Iraq.

The senior OPEC delegate said that even if OPEC did not formally suspend production limits, members with spare capacity would pump at will.

OPEC's current production ceiling stands at 24.5 million bpd with most members near to or at full capacity. The cartel is due to hold a policy meeting on March 11, which many believe could coincide with a strike on Iraq.

The United States and Britain said Wednesday they were working on a new resolution seeking United Nations' authorization to use force to disarm Iraq of banned weapons they claim it has stocked. The new resolution is expected to be submitted to the Security Council within a week.

Diplomats said Washington was not likely to push for a vote on the resolution until well into the first week of March after another report by U.N. weapons inspectors, an indication that any attack against Iraq will not take place until the second week of the month at the earliest.

Iraq denies U.S. allegations that it has stocked any biological, chemical or nuclear weapons.

reuters.com Thu February 20, 2003 01:52 AM ET By Tanya Pang

SINGAPORE (Reuters) - Oil prices were little changed near a 29-month peak Thursday, ahead of new data that may show further shrinkage in wafer-thin U.S. fuel stockpiles as the United States gears up for a possible invasion of oil-rich Iraq.

U.S. light crude CLc1 slipped 10 cents to $37.06 a barrel, just below a high at $37.45 struck Wednesday, which marked the highest level since September 2000 when soaring oil markets prompted the U.S. government to release emergency reserves.

Crude is just $4 below an all-time peak at $41.15 posted in the build up to the Gulf War in 1990.

Continued disruptions to strike-bound Venezuelan oil exports and possible interruptions to crude flows from Nigeria as oil workers down tools in a dispute over pay and conditions have stoked prices higher as well as the threat of an attack on Iraq.

Venezuela is fifth in world oil exporter rankings, while Nigeria is seventh and Iraq eighth.

"The market's still preoccupied with potential war, but it's not only that. Inventories are running very low and there's a real lack of any meaningful spare capacity," said Mario Traviati, head of energy at Merrill Lynch in Asia-Pacific.

"Anymore disruption to production would leave the world short of oil," he said.

The Energy Information Administration (EIA) is due to release its weekly U.S. fuel supply assessment Thursday, a day later than usual due to the public holiday earlier this week.

The EIA figures are used as a barometer for the demand and supply balance in the world's biggest oil consumer.

Figures last week showed U.S. crude stocks running at the lowest levels since the mid-1970s at just below 270 million barrels, the minimum needed to keep U.S. refineries operating.

A blast of Arctic weather has pumped up demand for heating fuel in the United States, where fuel supplies were already running down due to the anti-government strike in Venezuela, which crippled the domestic oil industry and all but cut off some 13 percent of U.S. oil imports.

Analysts forecast this week's EIA report would show further declines, with crude seen off by one million barrels and distillates, which include key heating oil, falling by three million barrels.

OPEC PLEDGES OIL

Striking state oil workers said Wednesday that Venezuelan crude production was at 1.4 million barrels per day, although the government pegged output closer to two million bpd.

Before the strike began on December 2, production was a little over three million bpd.

Exports from Nigeria, Africa's biggest producer, appeared not to have been affected so far by a strike by senior oil workers, who began their dispute Saturday.

Talks to resolve the dispute were due Thursday, postponed from a day earlier to allow union leaders to travel to Abuja.

Nigeria and Iraq export roughly two million bpd and, along with Venezuela, are members of the Organization of the Petroleum Exporting Countries.

OPEC has pledge to maintain stable supplies to the global market of 76 million bpd even in the event of war.

A Gulf source said Wednesday that Saudi Arabia, the world's biggest exporter, would support a temporary suspension of the cartel's official output limits if an attack halted overseas sales from Iraq.

The senior OPEC delegate said that even if OPEC did not formally suspend production limits, members with spare capacity would pump at will.

OPEC's current production ceiling stands at 24.5 million bpd with most members near to or at full capacity. The cartel is due to hold a policy meeting on March 11, which may be about the timing of a strike on Iraq.

The United States and Britain said Wednesday they were working on a new resolution seeking United Nations' authorization to use force to disarm Iraq of banned weapons they claim it has stocked. The new resolution is expected to be submitted to the Security Council within a week.

Diplomats said Washington was not likely to push for a vote on the resolution until well into the first week of March after another report by U.N. weapons inspectors, an indication that any attack against Iraq will not take place until the second week of the month at the earliest.

Iraq denies U.S. allegations that it has stocked any biological, chemical or nuclear weapons.

www.quicken.com Thursday, Febuary 20, 2003 01:26 AM ET  Printer-friendly version Associated Press

PUTRAJAYA, Malaysia -- Malaysian Prime Minister Mahathir Mohamad warned that any war with Iraq could push the price of oil up to US$50 a barrel and spark a surge in terrorism by angry Muslims.

Mr. Mahathir, who assumes chairmanship of the Non-Aligned Movement next week, also said that a new U.N. resolution on Iraq shouldn't merely rubber-stamp efforts by the U.S. and U.K. to justify an attack.

"It must be meaningful, not just a change of words with the intention that whatever happens, war must be declared on Iraq," Mr. Mahathir said in an exclusive interview with the Associated Press.

Washington and London are preparing to introduce a new security council resolution that could pave the way for military action against Baghdad if it fails to prove it has eliminated all weapons of mass destruction.

Mr. Mahathir said this was unacceptable to the Non-Aligned Movement - which groups 114 mostly developing nations and is one of the world's largest political organizations.

In a wide-ranging interview, Mr. Mahathir, who has been in office since 1981, warned that Iraq might destroy its oil fields if attacked and that world prices would rise quickly.

"Looking at what Iraq did in Kuwait, where it burned its oil fields, for a long time its oil will not be available and we still have dependence on Saudi oil and oil from Venezuela ... which of course will cause a rise in the price of oil maybe to US$50 a barrel," Mr. Mahathir said.

Nymex crude-oil futures rose Wednesday to a fresh 29-month high, with the March contract up 20 cents to $37.16 a barrel, as traders continued to fret about military action against Iraq.

The Malaysian leader also predicted that an attack on Iraq could set back efforts against international terrorism.

"I don't think overthrowing Saddam and trying to install a new democratic government is a solution that can actually happen," he said. "At the same time, it will cause a great deal of anger among Muslims worldwide and will contribute toward increasing the possibility of terrorism."

Malaysia has been an active ally in the U.S.-led war on terrorism, arresting scores of suspected terrorists and assisting Indonesia in its hunt for militants suspected in nightclub bombings in October on the Indonesian island of Bali where more than 200 people died.

But Mr. Mahathir criticized Washington's conduct of the war on terrorism, saying its focus had shifted to the confrontation with Iraq.

Mr. Mahathir complained that the West ignored a key cause of religious extremism, namely "the expropriation of Palestinian land to create the state of Israel."

"We insist that you should look into the causes. People don't just blow themselves up without reason," Mr. Mahathir said.

Dow Jones Newswires 02-20-03 0126ET