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To: 4figureau who wrote (2717)	1/17/2003 11:16:39 AM
From: 4figureau	Respond to of 5423

A new oil crisis is looming Commentary: Markets face big risks from Venezuela, Iraq By Paul Erdman, CBS.MarketWatch.com Last Update: 5:19 PM ET Jan. 16, 2003 SAN FRANCISCO (CBS.MW) -- The situation in the global markets is deteriorating at an alarming rate, and it's bound to get worse in the weeks ahead. Crude oil for February delivery is now approaching $34 a barrel and is currently at its highest level in two years. U.S. stockpiles of crude oil are down to 272 million barrels, the lowest level in 27 years. The combination of the threat of war in the Persian Gulf and the shutdown of oil production in Venezuela is, of course, the reason for this building crisis in the petroleum market. Market participants seem to have correctly anticipated what the consequences of war with Iraq would have on the crude price in the short run. Assuming that the war was quick and decisive, it was felt that the price of crude would rise to around $30. What seems to have surprised most observers is the length and depth of the crisis in Venezuela. Remember, Venezuela is the largest producer of oil outside of the Middle East, and the world's fifth-biggest oil exporter. Its output in the range of 2.5 - 3 million barrels a day is roughly equivalent to that of Iraq. But in contrast to Iraq, Venezuela plays a key role where the United States is concerned since its exports of crude oil to this country account for one out of every 10 barrels processed by U.S. refineries. The problem with Venezuela is that it does not involve a run-of-the-mill strike for higher wages and benefits. This shutdown has grown out of a struggle for control -- political control -- of that nation's key industry. It has pitted the country's radical left-wing President Hugo Chavez against the establishment that has run the state-owned oil company, known as Pdvsa, for many decades, and run it so successfully that it was regarded as the model for the rest of the world. Even the 30,000 oil workers at the company have joined the protest against him. The latest game plan of Chavez is to split the company in two, a ploy designed to hollow out its current management and replace it with political control, even if the result is a serious and long-lasting lowering of production. Moises Naim, Venezuela's former minister of trade and industry, has compared what is happening in Venezuela today to what happened in Iran in 1979 when the Shah was disposed and the country taken over by the mullahs. Iran's oil production collapsed from six million barrels a day to two million, and even today is still only half what it was in the 1970's. Should this situation persist in Venezuela and should the war with Iraq prove more prolonged and less decisive than now anticipated, we could easily see crude at $50 a barrel, and gasoline prices going through the roof. It is not very hard to guess what this would do to investor psychology. . . another reason to play it safe in the weeks ahead. cbs.marketwatch.com

To: 4figureau who wrote (2717)	1/18/2003 2:06:22 AM
From: Jim Willie CB	Read Replies (7) \| Respond to of 5423

China will come to fore more so each & every year this is just plain scary I wonder if they could offset a world demand decline our monetization efforts are building China into a powerhouse with our trade gap with China, they can accumulate a giant Central Bank, then copy our dubious fractional bank system, and develop a huge economy slowly and effectively but they will overbuild, guaranteed while they do, their purchases for everything under the sun will see growing demand, and the list includes all the commodities known to mankind GOLD is the most important perhaps right now since it will create a central bank for building that economy in a few years, the oil war will become very clear first the name is War on Terrorism to MidEasterners, it is known as a War on Islam soon the world will regard it as the Islamic Wars later the ancillary theme will be War for Oil / jim