CRUDE OIL PRICING & RELATED / PART 1 - International In Scope
11/10 15:37 Powerful storm lashes U.S. Midwest with snow, rain
BISMARCK, N.D., Nov 10 - A howling, pre-winter storm packing ice, sleet, snow and killer winds raked a wide area of the central United States on Tuesday, closing roads and schools and leaving at least two dead.
"Temperatures are dropping, the winds are picking up, and underneath the snow is ice, making for treacherous road conditions," Major Pat Richards of North Dakota'sem ergency management agency said
of the storm that dumped about a foot (30 cm) of snow on Bismarck.
"But this is North Dakota and we've been kind of expecting it," he added.
The brunt of the storm stretched from Missouri and Kentucky north to the Canadian border. In Louisville a woman was killed when winds blew a tree onto the car in which she was a passenger. At Brandenberg, Ky., winds toppled a wall at a construction site injuring six workers, two of them critically.
One highway fatality was reported on a snow-covered Minnesota road.
Power outages hit parts of several states. In downtown Chicago howling winds rattled skyscrapers and whipped building construction materials into the air. In the Chicago area more than 100,000 homes and businesses were without power.
Sections of major highways in North Dakota and Minnesota were shut down by the storm, which forced drivers off the roads as far south as Iowa. Residents were advised to avoid travel.
Wind gusts as high as 70 mph (113 km) were reported in some areas. Blizzard conditions were reported in the Dakotas.
"The (school) bus drivers simply can't see far enough to drive in this," said Gary Whitney of the South Dakota Emergency Management Agency.
The winds generated towering waves on parts of the Great Lakes.
Heavy rainstorms dumped around an inch (2.5 cm) of water on sections of Illinois and Indiana. Farther south powerful thunderstorms raked Tennessee and Mississippi.
A tornado-like storm roared through Columbia, Missouri, early on Tuesday, slightly injuring 16 people and ripping the roofs off roughly 20 homes.
Up to 100 other homes suffered minor damage in the central Missouri city and a gas main break forced several dozen people to evacuate.
11/10 15:43 U.S. tries a different approach to Iraq standoff
WASHINGTON, Nov 10 - Nine months ago, U.S. Secretary of State Madeleine Albright stood before a globe in Nashville, Tennessee, and explained to an audience of students why the United States was threatening Iraq with missiles and bombs.
In Washington, the Pentagon explained in detail the movement of three aircraft carriers into the Gulf, told editors where press conferences would be held in the event of an attack and warned a sceptical nation about possible losses of American lives.
Today, as President Bill Clinton is again poised to attack Washington's old nemesis President Saddam Hussein, there is little bombastic rhetoric, the details are scarce and there has been no concerted effort to explain the policy to Americans.
State Department spokesman James Rubin went a little further than usual on Tuesday, listing Saddam's perfidies as seen from Washington, including his 1990 invasion of Kuwait and earlier gassing of Kurdish villagers. The essence of U.S. policy, Rubin said, was "to prevent him from being a threat to his neighbors and the world."
"Our preference is for a peaceful resolution in which Saddam resumes cooperation with UNSCOM (the U.N. special commission inspecting Iraq's weapons of mass destruction).
"But if he continues to block UNSCOM and we do not respond, he will be able to reconstitute his weapons of mass destruction in a matter of months, not years. And if we fail to act, he will feel emboldened to threaten the region further, armed with weapons of mass destruction," Rubin said.
Iraq declared on Oct. 31 that it would no longer allow U.N. inspections of its chemical and biological weapons facilities.
The president and his aides are playing their cards close to their chests, letting information out in dribs and drabs and declining to discuss the precise objectives of any air strikes, which analysts say are likely to be very damaging.
So why is there a reticence to beat the drums and detail the military threat now, when there is apparently no lessening of U.S. resolve to contain Saddam?
Since February, when U.N. Secretary General Kofi Annan created a diplomatic solution to head off the last confrontation with Iraq, the U.S. emphasis has shifted toward patient diplomacy, aimed at unifying the U.N. Security Council in opposition to Saddam.
The administration has also deliberately portrayed U.S. initiatives as supporting the U.N., rather than being unilateral in nature.
Analysts believe these factors may have helped draw in more international support, including from France, which has hitherto opposed the use of military force against Iraq.
In addition, the atmosphere in Washington has changed.
Clinton, who struggled through 1998 to restore credibility damaged by his White House affair with Monica Lewinsky, was given a huge boost by the good showing of his Democratic Party in last week's mid-term elections.
With the likelihood of his impeachment waning, he is less likely to be accused now of striking Iraq to divert attention from his domestic problems.
The U.S. aim is to break out of a circle of threats and compromises which has left Saddam in charge of the agenda, provoking crises and signing unfulfilled deals. This time, U.S. officials say, they want a definitive solution.
Clinton met with his top national security advisers, including the generals who would be responsible for carrying out an attack, on Sunday and again on Tuesday, but Defense Secretary William Cohen said no decision had been taken on the use of force.
"We have all indicated that time is running out," he said when asked if Washington was getting closer to attacking Iraq.
The administration is carefully leaving Saddam in the dark about its intentions. Cohen indicated an attack could come without warning. "I think Iraq is on notice that it is obligated to comply with Security Council resolutions, it has had plenty of notice on those resolutions," he said.
The media has speculated about an attack by cruise missiles launched by U.S. forces already in the region, perhaps even in the next few days. Commentators noted Clinton had put off the start of an Asian trip from this Friday to Saturday.
But Cohen also hinted an attack might be delayed.
He said he was bringing forward to Nov. 26 the arrival in the Gulf of the aircraft carrier USS Enterprise, to replace the USS Eisenhower. This was "to give the people aboard the opportunity to train in place and that will be important in the event that any military action is required."
In February, when Washington last confronted Saddam on the inspection issue, it built up its Gulf force to three aircraft carriers and some 400 warplanes.
Military spokesmen now say the U.S. force of just over 20 warships and 174 aircraft in the Gulf region is sufficient.
11/10 15:58 U.S. says time running out for Iraq to comply
WASHINGTON, Nov 10 - The United States said on Tuesday that time was running out for Iraq to comply with U.N. arms inspections and said the aircraft carrier Enterprise was speeding to the Gulf where another U.S. carrier is now based.
Defense Secretary William Cohen told reporters that President Bill Clinton had made no decision on whether to launch U.S. missile and bombing strikes against Iraq, but said impatience with Iraq's President Saddam Hussein was growing.
"We have all indicated that time is running out," he said when asked if the United States was drawing closer to military action after Iraq abruptly announced on Oct. 31 that it was halting all cooperation with U.N. weapons inspectors.
"This can't go on forever. Diplomacy always should have every opportunity to dance. But at some point, a dance has a beginning and an end," Cohen said at Pentagon press conference with visiting Singapore Defense Minister Tony Tan.
"The military option is still on the table," said Cohen, adding that he had ordered the carrier Enterprise, which left Norfolk, Virginia, this week to replace the carrier Eisenhower in the Gulf, to speed its Atlantic Ocean transit and arrive on Nov. 23 instead of Nov. 26.
Cohen said he did not plan to keep both carriers in the region within striking distance of Iraq. The Eisenhower is winding up a six-months overseas deployment and scheduled to return to Norfolk in early December.
The United States already has a major air and naval force in the Gulf and the Pentagon says that force, including more than 300 ship-launched Tomahawk cruise missiles, is capable of dealing a powerful blow against Iraq.
Clinton met on Tuesday for an hour and a half with Cohen, Secretary of State Madeleine Albright, National Security Adviser Sandy Berger and Army Gen. Henry Shelton, chairman of the U.S. military Joint Chiefs of Staff, to discuss Iraq.
He also consulted by phone with British Prime Minister Tony Blair.
Albright, meanwhile, also was planning to discuss the crisis on the telephone with the foreign ministers of Britain, France and Russia, according to State Department spokesman Jamie Rubin.
Rubin told reporters that if Saddam continued to block U.N. arms inspections without any response, "he will be able to reconstitute his weapons of mass destruction in a matter of months, not years."
"And if we fail to act, he will feel emboldened to threaten the region further, armed with weapons of mass destruction," he added.
White House spokesman Joe Lockhart said the United States was engaged in "public and private" diplomacy but that: "This is not a situation where we're looking for a negotiation. There's nothing to negotiate."
The Marine helicopter carrier Belleau Wood was also heading to the Gulf from Japan on Tuesday to replace the helicopter carrier Essex and will arrive on Nov. 26, Cohen told reporters at the pentagon.
The United States has about 170 Air Force and Navy warplanes and 23 ships in the Gulf region, including the Eisenhower and eight ships capable of launching long-range Tomahawks.
But Defense Department spokesman Ken Bacon said a number of U.S.-based air units had been on 36-hour alert since earlier this year when they were returned from another showdown with Iraq and that the Gulf force could again be quickly built to nearly 400 aircraft if warranted.
Washington has seen no sign that Iraq is willing to budge on its refusal to cooperate with U.N. weapons inspectors and is preparing a military plan in the event no diplomatic solution can be reached.
So far no final ultimatum or deadline has been outlined by Clinton, who is scheduled to leave on Saturday on a 10-day Asia-Pacific tour.
Lockhart said Clinton planned to leave on his foreign trip as scheduled.
The New York Times said officials were making contingency plans about how Clinton's trip might be curtailed, or even canceled, if the president launched military strikes on Iraqi targets.
"I've got no change in schedule," Lockhart said. "Obviously there are things going on in the world. We are aware of the situation in Iraq. But I don't have a change in schedule to pass on to you."
In Baghdad, Iraq said it wanted a peaceful solution. Trade Minister Mohammed Mehdi Saleh said the key to ending the dispute was the lifting of sanctions imposed after Iraq's 1990-91 occupation of Kuwait.
The United Nations last Thursday condemned Iraq's abrupt ending of cooperation with U.N. inspectors, who must certify to the Security Council that Iraq is free of weapons of mass destruction before sanctions are lifted.
National Security Council spokesman David Leavy described the Iraqi idea as a "nonstarter."
11/10 18:35 U.S. oil industry hopes for Asian recovery by 2000
SAN FRANCISCO, Nov 10 -- The worst of Asia's economic woes could be over and a recovery could be under way by 2000, top U.S. oil executives, meeting at a major industry conference here, said on Tuesday.
And they agreed that the oil industry -- the first industry outside Asia to suffer when Asian currencies and economies began crumbling in 1997 -- will still be in dismal shape if an Asian recovery doesn't start to take place by then.
"A rebound could already be in the making," said Daniel Yergin, chairman of Cambridge Energy Research Associates and a featured speaker at the American Petroleum Institute's annual meeting, which ended here Tuesday.
"The oil industry was the first major industry outside Asia to suffer the effects of the Asian crisis...And the global oil industry would be among the first to respond to firm proof of recovery," Yergin said.
If Asian nations avoid the pitfalls of further currency devaluations and find foreign demand for their goods, "recovery and renewed rapid growth" will come by 2000, said Dwight Perkins of Cambridge Energy Research Associates, author of a report given at the API meeting.
The region that once fueled growth in world energy consumption and, in turn, helped oil companies reap double-digit profit gains hit hard times in mid-1997 and greatly lowered its demand for oil.
One after another, executives at the API meeting, including the heads of Exxon Corp., Shell and Chevron Corp., signaled significant cuts in capital spending for 1999, a direct result of oil prices that have dropped 40 percent since 1997, largely on slumping Asian demand. On Tuesday, the December crude oil futures contract on the New York Mercantile Exchange settled up 14 cents from Monday at $13.52 a barrel, butbelow the psychologically important $14-a-barrel mark.
"It would be tough to make a case that our spending in 1999 would be above 1998's," Exxon's Chairman and Chief Executive Officer Lee Raymond said.
Short-term production projects and marginal oil-producing fields will bear the brunt of cost cuts, Raymond and other oil companies' top executives said.
Exxon's Raymond said Asia is showing signs of recovery, at least in Thailand, where Exxon has large holdings.
Raymond said Exxon believes Thailand's "economy has bottomed out and is probably starting to come back."
Asia in recent years had accounted for as much as 50 percent of the world's growth in oil consumption.
If Asia recovers and buys more oil, prices will rebound. But Perkins said the situation in Asia may linger for much of 1999, a notion seemingly accepted by CEOs here. The CEOs say they are prepared to weather up to nine more months of low oil prices. Peter Bijur,chairman and CEO of Texaco Inc. <TX.N>, said he expected a return to $17- to $20-a-barrel crude oil before the end of 1999. But hesaid that a recovery in Asia would need to take place first, because he sees North American and European demand for oil as relatively stable.
Bijur and other CEOs, including Chevron's Ken Derr, say any Asian recovery will be modest in the near term. Texaco's Bijur pointed to the fact that the oversupply of oil took a while to build and will take a while to cut.
"I don't think people are looking for a return to double- digit growth," said Derr of Chevron.
On Tuesday, Exxon's stock lost $1.875 to $70.125 a share, while Chevron's stock fell $1.94 to $80.50, and Texaco's stock slipped 50 cents to $58, all in composite New York Stock Exchange trading. The American Depositary Receipts of Royal Dutch Petroleum also slid $1.3125 to $46.25 on Tuesday on the NYSE.
11/11 06:21 Iraqi oil exports normal, oil monitors still in place
LONDON, Nov 11 - Iraqi oil exports were continuing normally on Wednesday but U.N.-contracted monitors following up the programme have been put on standby in light of escalating tension between Baghdad and the United Nations., shipping sources said.
"Obviously they have their guys (in the southern export terminal of Mina al Bakr) on stand by. It would be foolish not to," noted one source in reference to the monitors from Saybolt, the Dutch firm responsible for monitoring Iraq's oil flow.
U.N. officials said that all U.N. inspectors and most of the U.N. relief staff were leaving Iraq on Wednesday in preparation for a possible U.S. military strike.
Richard Butler, head of the U.N. Special Commission (UNSCOM) in charge of disarming Iraq, ordered all his foreign staff of about 100 out of Iraq as a precautionary measure and Hans von Sponeck, the humanitarian coordinator, said all non-essential staff among the 220 relief workers would leave also.
The action comes amid reports that Washington was preparing a military strike against Iraq following Baghdad's freeze on UNSCOM's work unless there was a review of the sweeping sanctions imposed against it since its 1990 invasion of Kuwait.
But the shipping sources said Iraq's exports of Kirkuk and Basrah Light crude under the so called "oil-for-food" programme with the United Nations were continuing normally.
"One ship finished loading this morning and another one is arriving this afternoon," a source said when asked if the exports were continuing as normal.
He said the tanker Eclipse finished loading one million barrels of Basrah Light for China's Sinochem earlier on Wednesday and the Mos King, due to arrive later on Wednesday, was due to lift two million barrels of the same crude for Russian firm LUKoil.
"There's nothing new heard neither from the U.N. nor SOMO (Iraq's state oil marketing company) so for the time being as far as oil is concerned there is no official changes," another shipping source said of the exports through Mina al-Bakr and the Turkish port of Ceyhan.
"We have been notified that the U.N. is pulling its staff from the headquarters in Baghdad, that's all. Asked if there were any changes to Iraqi oil exports, the source said: "As we speak, no."
Asked if the overseers were still in place at the southern Iraqi port of Mina al-Bakr, he said: "As we speak, yes. But there are contingency plans...if necessary".
Under the terms of the oil for food programme Iraq is theoretically allowed oil sales of up to $5.256 billion every six months period to pay for foods and medicines for its citizen reeling under the tough sanctions.
But it cannot reach this level due to damage from the 1991 Gulf War and a lack of proper maintenance to its infrastructure since then.
The current phase of the oil-for-food deal expires on November 25.
Iraq maintains that there is no link between the oil-for-food plan and UNSCOM's activities.
11/11 08:43 Arrieta says no new cuts, but may see Naimi Wed.
BUENOS AIRES, Nov 11 - Venezuela's oil minister Erwin Arrieta re-iterated on Wednesday that his country would be considering no new oil production cutbacks to shore up ailing world oil prices.
"Not at all," Erwin Arrieta said when asked whether he felt further cuts would be possible.
But he said that he may discuss market conditions with Saudi Arabian oil minister Ali al-Naimi on Wednesday if the opportunity arises on the sidelines of United Nations climate discussions in Buenos Aires.
Both Naimi and Arrieta are attending the Nov 2-13 Buenos Aires summit, where world environment ministers have gathered to discuss measures for the industrialized world to cut its emissions of carbon dioxide and other heat-trapping gases in coming decades.
"Of course you meet in a city, you sit down and have a cup of coffee, and you talk about the latest developments," Arrieta told Reuters.
He added that any extension of existing output reductions by major oil producers would be subject to future oil market developments.
"We are constantly monitoring the market and communicating among the ministers, and not just OPEC ministers," Arrieta said.
"Everything is subject to and depends upon the behaviour of the market," he said.
The Organization of the Petroleum Exporting Countries (OPEC) has clubbed together with non-OPEC producers this year for two rounds of production cuts, pledging to shed a total of 3.1 million barrels per day (bpd) from world production.
But the cuts have done little to support world oil prices, which have wallowed some $6-$7 per barrel lower than year-ago levels for much of this year.
International benchmark Brent dipped below $12 a barrel on Tuesday, dangerously close to the 10-year low of $11.55 hit in August, and was trading in a range near $12.20 a barrel in midday London trade.
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