www.canoe.ca Thursday, January 30, 2003 By TODD NOGIER, BUSINESS EDITOR

 Now the dark cloud of Kyoto hanging over the oilsands has begun to disappear, Enbridge will position itself as the pipeline operator of choice to transport the crude to hungry U.S. markets, the company's chief said yesterday. Patrick Daniel, CEO of the Calgary-based pipeline and energy giant, said recent clarifications of costs under the Kyoto climate change deal have given producers the confidence to look to the oilsands as a more secure energy resource for the U.S. And as a dominant transporter of oilsands crude, Enbridge looks to cash in on the investment craze of the oil-soaked region of northeastern Alberta. "Momentum (in the oilsands), I think, really has been regained now that the Kyoto overhang appears to be dissipating," Daniel told analysts yesterday. GOOD QUARTER Enbridge released solid financial results yesterday, announcing it earned $34 million, or 18 Canadian cents a share, in the last quarter, down from a year-earlier $40 million, or 25 Canadian cents a share. Adjusting for a $5.9 million loss on the sale of the Enbridge Midcoast assets to 12.9% owned Enbridge Energy Partners, the company's earnings were $40 million, or 25 Canadian cents a share, just a penny under an average estimate among analysts. Daniel said Enbridge is now scouring the troubled U.S. energy pipeline industry looking to expand its holdings in that country to bring oilsands crude to market. Many of the questions on how the Kyoto Protocol affects operating costs in the oilsands were answered in December when federal Natural Resources Minister Herb Dhaliwal put caps on emissions and credit levies. Political unrest in Venezuela and the potential for war between the U.S. and Iraq have increased the oilsands' profile as a more secure resource, said Daniel. "The disruption of imports from Venezuela and the continuing risk of interuptions in the Middle East really highlights the reliability and long-term role of Canadian supply -- and that positioning has never been better," he said. Enbridge is one of Canada's biggest diversified energy companies. It owns and operates the major pipeline shipping Alberta oil to eastern markets and also owns Enbridge Consumers Gas, Canada's largest natural gas distributor. The company, with about 4,000 employees, has also been expanding in the U.S. and South America.

economictimes.indiatimes.com REUTERS[ THURSDAY, JANUARY 30, 2003 12:22:36 PM ]

SINGAPORE: Oil prices dipped on Thursday on renewed hopes of averting a war in Iraq as the United States launched one last diplomatic push to pressure Iraqi President Saddam Hussein to give up alleged weapons of mass destruction.

But prices held onto most of the gains made after a big drop in U.S. winter heating fuel stocks deepened oil supply worries.

U.S. light crude futures were down 23 cents at $33.40 a barrel, or $1.80 below a 26-month high struck last week. The small decline came after a jump of 96 cents, or three per cent, in New York trading on Wednesday.

The threat of war in the Gulf region that supplies 40 per cent of world crude oil exports, and a strike that has cut exports from Venezuela, have pushed up prices 35 per cent since late November.

The White House said on Wednesday the standoff with Iraq over U.N. disarmament demands was entering a "final phase" in which U.S. President George W. Bush and other U.S. officials would intensify diplomacy in one last bid to avoid war.

Bush said Secretary of State Colin Powell would reveal new intelligence on Baghdad's alleged weapons of mass destruction to the U.N. Security Council on February 5.

German Chancellor Gerhard Schroeder, one of the European leaders most strongly opposed to war on Iraq, said on Wednesday he was unsure whether diplomacy would succeed in averting war.

Analysts said the market expected further price gains as European government support for war grew on Wednesday even as surveys showed public opposition has hardened in Europe, including in Britain, Washington's closest ally.

"The timetable for war in Iraq is getting shorter..." said Sydney-based independent energy analyst Simon Games-Thomas.

Veto-wielding United Nations Security Council members France and Russia, publicly dead set against a strike on Iraq, showed signs on Wednesday that they could side with the United States if the situation in the Gulf comes to war.

Wednesday's price gains came as the U.S. government reported that a two-week freeze across the eastern part of the country lopped over three million barrels, or eight per cent, from heating oil stocks last week.

"Though it would be easy to focus on the near-$1 rally in crude prices, the real story for the day was the disproportionate strength in heating oil and gasoline prices," said Michael Rothman, energy analyst at Merrill Lynch, in his daily note.

Supplies are now 16-per cent below normal levels. Home heating oil prices are at 23-month highs, up 25 per cent from last year, boosting concern over the economic impact of higher energy costs.

While the freeze is forecast to abate in coming days, supplies may not recover as the high cost of crude oil is forcing refiners to cut their production.

The United States has taken about two-thirds of all Iraq's U.N.-controlled oil exports in January amid a dearth of shipments from key supplier Venezuela since early December due to a strike aimed at removing President Hugo Chavez from office.

Venezuela, which normally supplies more than 13 per cent of U.S. oil imports, said on Wednesday it had managed to raise strike-hit oil production to 1.4 million barrels per day (bpd), while striking oil workers put the output level at just over one million bpd.

www.globeandmail.com Bloomberg News Thursday, January 30, 2003 – Page B22

Crude oil rose almost 3 per cent yesterday as U.S. inventories fell and U.S. President George W. Bush signalled that he was moving closer to an attack on Iraq.

Mr. Bush said yesterday that Iraq's ties to terrorists make it a danger, and said "the full force and might" of the U.S. military was available to disarm the country. An attack would threaten oil from the Persian Gulf, which accounts for almost a fourth of U.S. imports. The Energy Department said U.S. supplies were down 14 per cent from a year ago after falling last week.

"Prices will soar the moment it's clear an invasion is imminent," said Marshall Steeves, an analyst with Refco Group Ltd. in New York. "They could easily pass $40 [U.S.] a barrel. Once it's clear that the U.S. is about to take the oil fields, there will be a major collapse."

Oil has rallied 23 per cent during the past two months on concern that there might be a war in Iraq and as a strike in Venezuela disrupted exports.

The surge in crude oil yesterday helped pull gasoline futures to a 20-month high and heating oil to the highest price in two years.

Natural gas futures rose 4 per cent after freezing U.S. temperatures boosted heating demand in the past two weeks, shrinking fuel supplies that were already down from last year.

Analysts estimated that gas inventories fell 12 per cent last week after declining 9.6 per cent the previous week. That would be the largest single-week decline in three years and leave supplies down 27 per cent from last year, raising concern that production this year won't be enough to build supplies sufficiently before next winter.

"The trading community is looking for a very large drop" in stored supplies, said Joe Terranova, director of trading for MBF Clearing Corp. in New York. "It's much larger than you've seen in years past. It's suggesting that the demand is far greater, and supply is slightly less than what it needs to be to meet the demand."

www.quicken.com Thursday, January 30, 2003 00:20 AM ET     Crimped by high oil prices and declining crude inventories, refiners are likely to hold off stockpiling gasoline for the spring, and that could result in sharply higher prices at the pump during the busy summer-driving season, Thursday's Wall Street Journal reported

Gasoline prices already have been climbing, pushed upward by the rising price of crude oil. The U.S. average retail price of a gallon of regular unleaded gasoline has risen 8% since early December to $1.47 as of Monday, and prices are expected to go even higher. The Energy Information Administration, the statistical arm of the Department of Energy, predicts an average price of at least $1.50 a gallon in February, a 40-cent-a-gallon jump above the same period last year, and of $1.54 a gallon by midspring.

Those forecasts don't take into account a possible war in Iraq and a subsequent disruption of oil from that Middle East country. A cold February, too, could result in refiners making more heating oil at the expense of gasoline.

The worrisome outlook comes as a strike in Venezuela, aimed at forcing President Hugo Chavez from office, has depleted U.S. crude-oil stocks about 5% since December to 273.8 million barrels. The EIA considers that "very low" -- 11% below the five-year average for this time of year.

Low crude-oil stocks have begun impacting gasoline production. Although nationwide inventories of gasoline are at 216.3 million barrels, about the same as a year ago, the EIA reported that the amount of crude run through U.S. refineries dropped last week by about 400,000 barrels a day to 14.6 million barrels a day, the lowest level since October.

Wall Street Journal Staff Reporters Thaddeus Herrick and Alexei Barrionuevo contributed to this article.

Dow Jones Newswires 01-30-03 0020ET

www.bangkokpost.com Market sees war on the horizon

Oil prices edged lower yesterday but kept their firm tone after US President George W. Bush promised to deliver new intelligence on Iraq's alleged weapons programmes.

In his State of the Union address on Tuesday night, Bush said his Secretary of State Colin Powell would reveal the information on Baghdad's weapons of mass destruction to the UN Security Council next week.

US light crude slipped 15 cents to $32.68 a barrel and London Brent blend lost 17 cents to $30.10 a barrel.

``The market has completely accepted that there will be war and that's already in the price,'' said Sarah Emerson, managing director at Boston-based Energy Security Analysis (ESAI).

``The timetable was set months ago by troop deployments. They will all arrive by the end of February.''

The threat of war in the Gulf region that supplies 40% of world crude exports and a strike that has cut exports from Venezuela have pushed up crude prices nearly 30% since late November.

Bush accused Iraqi leader Saddam Hussein of showing ``utter contempt'' for the United Nations by producing chemical and biological weapons and plotting to use them to dominate the Middle East.

He said Saddam had failed to account for 30,000 munitions capable of delivering chemical agents, 38,000 litres of botulinum toxin and materials that could produce as much as 500 tonnes of sarin, mustard and VX nerve gas.

The United States will ask the Security Council to convene on February 5 to hear fresh evidence of these and other intelligence findings.

``It was interesting that he was so explicit on the February 5 date. The market has a new date to think about, until that time everyone's going to be reading the tea leaves for what Powell's going to present,'' Emerson said.

The intelligence would form one part of the US push to persuade key countries _ including permanent Security Council members France, Russia and China _ that military force is necessary to disarm Iraq.

Washington and London are building forces in the Gulf region and are expected to be ready for combat in the latter part of next month. Chief UN weapons inspector Hans Blix is due to update the Security Council on weapons inspectors' findings on February 14.

Bush said secret communications and statements from suspects now in custody reveal Saddam ``aids and protects terrorists'' including members of al-Qaeda and could provide them with weapons of mass destruction.

Earlier on Tuesday, Washington received strong backing from its main ally against Iraq when Britain said Baghdad was in ``material breach'' of UN disarmament demands. On Friday, Bush meets British Prime Minister Tony Blair, who is expected to urge further patience with the UN approach for now.

Britain has consistently backed the US but had until now avoided directly alleging a ``material breach'' of November's UN resolution 1441 demanding Iraqi disarmament, which Washington argues is the trigger for war.

The US president's arguments in favour of toppling Saddam by force if necessary have left many countries unconvinced that Iraq poses an immediate threat. Many US allies have called for the inspectors to be given more time to work in Iraq.