Sun, Jan 05, 2003 - Page 11 News List

Crude oil may rise above two-year high next week

BLOOMBERG , SINGAPORE

Crude oil prices may rise from a two-year high because violent protests in Venezuela may delay the resumption of normal supply from the fifth-biggest oil exporter.

President Hugo Chavez, who is considering declaring a state of emergency to end a national strike, may fail to make good on a pledge to restore full production in six weeks, analysts said.

Venezuelan soldiers fired tear gas and rubber bullets yesterday to disperse demonstrators near an army base. Two people were killed in protests in the capital, AFP reported.

"Until now, it's been surprisingly peaceful. An emergency may bring the armed forces into control," said Simon Games-Thomas, an independent energy consultant in Sydney. "It will be a while before oil production in the country returns to normal.

We'll be seeing the impact on the US crude inventories for at least several weeks."

Crude oil for February delivery gained 3.9 percent to US$33.08 a barrel yesterday on the New York Mercantile Exchange, its highest closing price since Nov. 30, 2000. Reports this week showed US supplies were 10 percent lower than a year ago as the strike, aimed at ousting Chavez, limited Venezuela's output.

"We finally got the data that proves we have a supply problem," Bill O'Grady, director of fundamental futures research at AG Edwards & Sons Inc in St. Louis said yesterday. "The fields in Venezuela are missing needed maintenance. When the strike is over they are going to have a mess on their hands and it will take a long time for production to recover."

The near-month oil futures contract climbed 57 percent last year. Prices rose 1.1 percent this week, their seventh straight weekly gain.

On the up and up

* Crude oil for February delivery gained 3.9 percent to US$33.08 a barrel on the New York Mercantile Exchange

* The near-month oil futures contract climbed 57 percent last year.

* Prices rose 1.1 percent this week, their seventh straight weekly gain.


Chavez earlier asked Brazilian President Luiz Inacio Lula da Silva to provide technicians and engineers from Brazil's state- controlled oil company to help run Venezuela's oil installations.

Chavez made similar appeals to Mexico and Ecuador.

Brazil's largest oil workers union would oppose sending its engineers to help Chavez break the strike, a union leader said.

It's too dangerous to send Brazilian workers to Venezuela during a potentially violent strike, said Antonio Carrara, national coordinator for the Brazilian Petroleum Workers Federation.

"As part of the international union movement, we don't make it our policy to intervene against unions that are on strike," said Carrara.

Tens of thousands of Chavez opponents marched through Caracas to demand the release of National Guard General Carlos Alfonzo Martinez. The opposition planned to mass hundreds of thousands of protesters in front of the Fuerte Tiuna army base where the dissident general is being held.

Two people died in hospital from gunshot wounds after fighting between pro- and anti-government protesters, Agence France-Presse said, citing Pedro Aristimuno, Caracas head of health services.

A total of six people were injured by bullets during the fighting, AFP said. Police said seven officers had been injured.

Venezuela's output is now 172,000 barrels a day, Horacio Medina, president of the union of management workers, Unapetrol, said. Chavez has said the output by state oil company Petroleos de Venezuela SA was 800,000 barrels.

potentially violent strike, said Antonio Carrara, national coordinator for the Brazilian Petroleum Workers Federation.

"As part of the international union movement, we don't make it our policy to intervene against unions that are on strike," said Carrara.

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