- The Washington Times - Friday, December 27, 2002

From combined dispatches
Americans are starting to feel the pinch of the oil-worker strike in Venezuela: The average price U.S. homeowners paid for heating oil jumped last week, and gasoline prices are expected to rise in the coming weeks.
Venezuela, the world's fifth-biggest oil exporter and fourth-largest foreign crude supplier to the United States, has seen its production fall from about 3 million barrels per day to less than 300,000 barrels per day since a national general strike began Dec. 2 aimed at ousting President Hugo Chavez.
The national price for heating oil increased 3 percent during the past week to $1.36 a gallon. It was the biggest weekly jump so far this winter heating season. The latest heating-oil price, based on a survey by the Energy Department's Energy Information Administration, is up 21 cents from a year ago.
The highest price reported for heating oil was in the District of Columbia, where in the most recent week consumers paid $1.54 per gallon, up 1.7 cents from last week, the administration said.
Gasoline prices so far have not reflected the Venezuelan strikes but are expected to rise a few cents a gallon.
House Energy and Commerce Committee Chairman Billy Tauzin, Louisiana Republican, fearing for the nation's supply of oil, asked the Bush administration on Monday to consider opening the Strategic Petroleum Reserve, a national stockpile of oil to be used in case of war or national emergency. Two Gulf Coast refineries said they could run out of oil to process if Venezuela's stoppage continued into next year.
"The last few weeks we've had higher crude prices but haven't seen a commensurate rise in fuel prices at the pumps. But it's in the pipeline, I expect," said Lon Anderson, spokesman for AAA Mid-Atlantic. Gasoline prices are 31 cents higher than at the same time last year and should rise "a few pennies" from a metro area average of $1.41 for regular unleaded, he said.
The higher prices coincide with lower heating-fuel supplies, significantly colder weather on the East Coast and higher crude costs caused by the disruption in Venezuela's oil exports. The threat of war in the Middle East also casts a shadow on energy markets.
"In the big scheme of things, Venezuela is important but not critical," Mr. Anderson said, noting that it provides 9 percent of the U.S. oil supply. "It becomes more critical when you look at other things that may impact oil prices. Venezuela, a colder winter and the threat of war in the Middle East, those things together could cause a very sharp rise in the cost of gasoline for motorists."
Crude oil prices rose to a two-year high on speculation that the government of Venezuela will be unable to fulfill a pledge to boost exports that have been limited by the strike.
The price of crude oil for February delivery was up 52 cents, or 1.6 percent, at $32.48 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange yesterday. If oil settles at that level, it would be the highest closing price since Nov. 30, 2000.
Ali Rodriguez, president of state-owned Petroleos de Venezuela SA, said he expected most oil workers to be back on the job by mid-January and exports to return to normal by the end of the month, the New York Times reported yesterday. Analysts and traders are skeptical that normal shipments can be restored before the strike ends.
"Every day that passes we miss another 2.5 million to 3 million barrels of oil," said Andrew Lebow, an energy broker with Man Financial Inc. in New York. "The strike continues, and there's no resolution in sight."
Before the walkout, Venezuela pumped 3 million barrels a day of crude oil and exported 2.4 million barrels. Venezuela was loading between 12 and 14 tankers a day before the strike.
Strikers are demanding that Mr. Chavez, who was elected to a six-year term in 2000, resign or call early elections. They say he has violated private-property rights, undermined press freedoms and driven the economy into recession. Mr. Chavez has said he would consider calling a vote on his presidency in August.
Talks between the government and opposition leaders were set to resume yesterday for the first time in three days under the mediation of the Organization of American States. Opposition leaders have called for protest marches to continue this week throughout the country.

Staff writer Jeffrey Sparshott contributed to this report.

Copyright © 2019 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide