asian exporters fear damage from u s japan rift mounting trade friction between the u s and japan has raised fears among many of asia s exporting nations that the row could inflict far reaching economic damage businessmen and officials said they told reuter correspondents in asian capitals a u s move against japan might boost protectionist sentiment in the u s and lead to curbs on american imports of their products but some exporters said that while the conflict would hurt them in the long run in the short term tokyo s loss might be their gain the u s has said it will impose mln dlrs of tariffs on imports of japanese electronics goods on april in retaliation for japan s alleged failure to stick to a pact not to sell semiconductors on world markets at below cost unofficial japanese estimates put the impact of the tariffs at billion dlrs and spokesmen for major electronics firms said they would virtually halt exports of products hit by the new taxes we wouldn t be able to do business said a spokesman for leading japanese electronics firm matsushita electric industrial co ltd mc t if the tariffs remain in place for any length of time beyond a few months it will mean the complete erosion of exports of goods subject to tariffs to the u s said tom murtha a stock analyst at the tokyo office of broker james capel and co in taiwan businessmen and officials are also worried we are aware of the seriousness of the u s threat against japan because it serves as a warning to us said a senior taiwanese trade official who asked not to be named taiwan had a trade trade surplus of billion dlrs last year pct of it with the u s the surplus helped swell taiwan s foreign exchange reserves to billion dlrs among the world s largest we must quickly open our markets remove trade barriers and cut import tariffs to allow imports of u s products if we want to defuse problems from possible u s retaliation said paul sheen chairman of textile exporters taiwan safe group a senior official of south korea s trade promotion association said the trade dispute between the u s and japan might also lead to pressure on south korea whose chief exports are similar to those of japan last year south korea had a trade surplus of billion dlrs with the u s up from billion dlrs in in malaysia trade officers and businessmen said tough curbs against japan might allow hard hit producers of semiconductors in third countries to expand their sales to the u s in hong kong where newspapers have alleged japan has been selling below cost semiconductors some electronics manufacturers share that view but other businessmen said such a short term commercial advantage would be outweighed by further u s pressure to block imports that is a very short term view said lawrence mills director general of the federation of hong kong industry if the whole purpose is to prevent imports one day it will be extended to other sources much more serious for hong kong is the disadvantage of action restraining trade he said the u s last year was hong kong s biggest export market accounting for over pct of domestically produced exports the australian government is awaiting the outcome of trade talks between the u s and japan with interest and concern industry minister john button said in canberra last friday this kind of deterioration in trade relations between two countries which are major trading partners of ours is a very serious matter button said he said australia s concerns centred on coal and beef australia s two largest exports to japan and also significant u s exports to that country meanwhile u s japanese diplomatic manoeuvres to solve the trade stand off continue japan s ruling liberal democratic party yesterday outlined a package of economic measures to boost the japanese economy the measures proposed include a large supplementary budget and record public works spending in the first half of the financial year they also call for stepped up spending as an emergency measure to stimulate the economy despite prime minister yasuhiro nakasone s avowed fiscal reform program deputy u s trade representative michael smith and makoto kuroda japan s deputy minister of international trade and industry miti are due to meet in washington this week in an effort to end the dispute reuter japan given little hope of avoiding u s sanctions a top u s official said japan has little chance of convincing the u s to drop threatened trade sanctions despite the efforts of a japanese team that left for washington today michael armacost under secretary of state for political affairs was asked at a press conference whether japan s moves to boost its domestic economy and open its markets could persuade the u s not to impose tariffs on japanese imports said and replied it is probably too early for the figures to demonstrate that the situation has turned around and to permit the result you have described armacost said the u s hopes japan will take steps to lift its domestic economy and reduce dependence on exports remove barriers to imports and settle outstanding trade issues there are obvious problems at the moment in the trade area but we do not wish those problems to divert attention from important areas of cooperation that continue to exist on security and political issues he said the question is whether through cooperative actions between our governments we can reduce the trade imbalance or whether congress takes action to reduce it through protectionist legislation he said reuter japanese official takes data to microchip talks ministry of international trade and industry miti vice minister makoto kuroda leaves for washington today with data he hopes will refute u s charges japan has violated a pact on microchip trade a three man japanese trade team is already in washington laying the groundwork for talks between kuroda and deputy u s trade representative michael smith aimed at persuading the u s not to impose tariffs on certain japanese products but kuroda said he is taking no new proposals i have nothing in my briefcase except an explanation of the current situation kuroda told the daily newspaper asahi shimbun kuroda said the u s decision was based on incorrect data and an exaggerated sense of miti s power to control market forces the u s has excessive expectations to stabilise supply demand relations which have been disrupted by excess inventories since will take some time he said kuroda also laid part of the blame for low u s chip sales in japan on a lack of effort by american firms here he said if he fails in talks tomorrow and friday to forestall sanctions he will seek further talks with u s trade representative clayton yeutter u s officials said this week s talks are unlikely to delay imposition of tariffs reuter japan given little hope of avoiding u s sanctions a top u s official said japan has little chance of persuading the u s to drop threatened trade sanctions despite the efforts of a japanese team that left for washington today michael armacost under secretary of state for political affairs was asked at a press conference whether japan s moves to boost its domestic economy and open its markets could persuade the u s not to impose tariffs on japanese imports said and replied it is probably too early for the figures to demonstrate that the situation has turned around and to permit the result you have described armacost said the u s hopes japan will take steps to lift its domestic economy and reduce dependence on exports remove barriers to imports and settle outstanding trade issues there are obvious problems at the moment in the trade area but we do not wish those problems to divert attention from important areas of cooperation that continue to exist on security and political issues he said the question is whether through cooperative actions between our governments we can reduce the trade imbalance or whether congress takes action to reduce it through protectionist legislation he said reuter stoltenberg sees moves to strengthen paris accord west german finance minister gerhard stoltenberg said today s meetings of major industrial countries would look at ways of strengthening the paris accord on stabilizing foreign exchange rates stoltenberg told journalists he saw no fundamental weakness of the february agreement of the group of five countries and canada to keep exchange rates near the then current levels but he declined to say what measures would be discussed ahead of a communique of the group of seven ministers later today stoltenberg and bundesbank president karl otto poehl said the importance of the paris agreement also known as the louvre accord had been underestimated stoltenberg said there is greater agreement now among major countries than six months ago at the time of the annual meeting of the international monetary fund and world bank marked by sharp discord between the united states and its major trading partners there is no fundamental weakness of the paris accord he said we will be looking at ways of strengthening it but i do not want to discuss that here stoltenberg said the louvre agreement was working despite a slight firming of the yen against the dollar and poehl noted that the dollar mark parity was unchanged since february without the bundesbank having had to sell marks to support the dollar the louvre agreement has been honored by the market he said poehl said west germany had lived up to its side of the bargain in paris by preparing the way for tax cuts to be accelerated as a way of stimulating growth poehl said however that japan had not yet fulfilled its pledges for economic stimulation and we will have to see if the united states is able to do what they promised in paris on reducing the budget deficit and get it through congress he added stoltenberg reiterated west german concern about a further fall in the dollar noting that the mark was up pct against the dollar and nearly pct on a trade weighted basis you cannot expect that to go unnoticed in an economy and it is not just a german problem it is a european problem he said reuter top officials arrive at treasury for g talks top officials of leading industrial nations arrived at the u s treasury main building to begin a meeting of the group of five officials seen arriving by reuter correspondents included west german finance minister gerhard stoltenberg and bundesbank president karl otto poehl french finance minister edouard balladur and his central banker jacques de larosiere also seen arriving were japanese finance minister kiichi miyazawa and japan s central bank governor satoshi sumita and british chancellor of the exchequer and central bank governor robin leigh pemberton there was no immediate sign of italian or canadian officials monetary sources have said a fully blown meeting of the group of seven is expected to begin around p m local time gmt and last at least until p m gmt when a communique is expected to be issued italian sources said italian acting finance minister giovanni goria met treasury secretary james baker last night at those talks baker apparently convinced goria who declined to attend the february meeting of the group of seven in paris that italy would participate fully in any meaningful decisions reuter japan in last ditch effort to avert tariffs senior japanese officials tomorrow open talks with american trade negotiators in a last ditch effort to avert new high u s tariffs to be imposed on a wide variety of japanese electronic exports makoto kuroda vice minister of japan s ministry of international trade and industry miti is to hold two days of meetings with the deputy u s trade representative michael smith and the under secretary of commerce bruce smart the new tariffs to go into effect on april are in retaliation for japan s failure to adhere to an agreement to end dumping semiconductors in world markets at below cost and to open its home market to u s semiconductor shipments they are to be imposed on goods which use semiconductors including television and audio equipment and computers both u s and japanese officials have said there was little likelihood the talks would do anything to avert the pct duties on mln dlrs worth of japanese shipments president reagan announced the planned tariffs on march after he said that close monitoring of the july u s japanese semiconductor pact convinced u s officials that japan was not honoring the agreement in making the annoucement reagan said i am committed to the full enforcement of our trade agreements designed to provide american industry with free and fair trade trade analysts said his move was aimed as much at japan s semiconductor trade practices which are said to have injured the u s semiconductor industry as congress which has complained about presidential timidity on trade issues congressional democrats have pledged to enact aggressive trade laws to counter what they contend has been reagan s inaction to redress the growing u s trade deficit which last year reached billion dlrs about one third of the deficit was with japan reagan said there were recent signs japan was beginning to adhere to the pact and that was why he was not terminating it kuroda said on leaving tokyo today he had no new proposals but did have an explanation of the semiconductor situation he told the daily newspaper ashai shimbun that reagan s decision was based on inaccurate data and an exaggerated sense of miti s power to control japanese traders the united states has excessive expectations he said to stabilize supply demand relations which have been disrupted by excess inventories since will take some time he also said that u s firms had not been aggressive enough in trying to sell in the japanese market reuter white house standing firm on japanese sanctions presidential spokesman marlin fitzwater said u s trade sanctions against japan were likely take effect on april in spite of a full court press by japanese officials to avoid them all indications are they will take effect he said i would say japan is applying the full court press they certainly are putting both feet forward in terms of explaining their position fitzwater told reporters he noted high level meetings on the trade dispute are underway here but said i don t think there s anything i can report and i don t believe there s been any official movement reuter turkey calls for dialogue to solve dispute turkey said today its disputes with greece including rights on the continental shelf in the aegean sea should be solved through negotiations a foreign ministry statement said the latest crisis between the two nato members stemmed from the continental shelf dispute and an agreement on this issue would effect the security economy and other rights of both countries as the issue is basicly political a solution can only be found by bilateral negotiations the statement said greece has repeatedly said the issue was legal and could be solved at the international court of justice the two countries approached armed confrontation last month after greece announced it planned oil exploration work in the aegean and turkey said it would also search for oil a face off was averted when turkey confined its research to territorrial waters the latest crises created an historic opportunity to solve the disputes between the two countries the foreign ministry statement said turkey s ambassador in athens nazmi akiman was due to meet prime minister andreas papandreou today for the greek reply to a message sent last week by turkish prime minister turgut ozal the contents of the message were not disclosed reuter white house says japanese tarriffs likely the white house said high u s tariffs on japanese electronic goods would likely be imposed as scheduled on april despite an all out effort by japan to avoid them presidential spokesman marlin fitzwater made the remark one day before u s and japanese officials are to meet under the emergency provisions of a july semiconductor pact to discuss trade and the punitive tariffs fitzwater said i would say japan is applying the full court press they certainly are putting both feet forward in terms of explaining their position but he added that all indications are they the tariffs will take effect reuter iraqi troops reported pushing back iranians iraq said today its troops were pushing iranian forces out of positions they had initially occupied when they launched a new offensive near the southern port of basra early yesterday a high command communique said iraqi troops had won a significant victory and were continuing to advance iraq said it had foiled a three pronged thrust some km six miles from basra but admitted the iranians had occupied ground held by the mohammed al qassem unit one of three divisions attacked the communique said iranian revolutionary guards were under assault from warplanes helicopter gunships heavy artillery and tanks our forces are continuing their advance until they purge the last foothold occupied by the iranians it said iran said its troops had killed or wounded more than iraqis and were stabilising their new positions the baghdad communique said iraqi planes also destroyed oil installations at iran s southwestern ahvaz field during a raid today it denied an iranian report that an iraqi jet was shot down iraq also reported a naval battle at the northern tip of the gulf iraqi naval units and forces defending an offshore terminal sank six iranian out of iranian boats attempting to attack an offshore terminal the communique said reuter group of five meeting ends a meeting of finance ministers and central bankers of the group of five ended after nearly three and a half hours west german finance minister gerhard stoltenberg and british chancellor of the exchequer nigel lawson declined to comment on the meeting as they emerged from the u s treasury a european monetary official said the ministers of the group of seven countries would gather at about three p m local gmt at the treasury reuter ghana to buy crude oil from iran ghana will import tonnes of crude oil annually from iran under an agreement reached in tehran today the iranian news agency irna reported the agency received in london said the accord was reached between iranian oil minister gholamreza aqazadeh and a visiting ghanaian delegation headed by foreign minister obed asamoah irna said that under the agreement iran will also provide technical and scientific assistance in manpower training and oil exploitation production and refining reuter industrial nations reconvene for talks financial ministers and central bankers of leading industrial nations reconvened here this afternoon canadian finance minister michael wilson said on entering the meeting the ministers would review the paris agreement asked if he was satisfied with west german and japanese stimulus wilson replied they could do a little more french finance minister edouard balladur meanwhile confirmed there would be a communique at the end of the meeting finance ministers and central bankers of britain france canada and west germany were seen by reuter correspondents returning to a treasury building japanese officials and bundesbank president karl otto poehl did not appear to have left the building at the end of earlier group of five talks which broke up around p m local time gmt there was no sign however of the italian delegation whose position was thrown into question this morning by the resignation of the christian democratic wing of italy s socialist led government european monetary officials said later that the italian delegation was inside the building this meant that a full blown meeting of the group of seven was in progress reuter deficit cuts seen unable to cure trade deficit financial analysts say they are pleased with congressional moves to trim next year s federal budget deficit but believe the actions will do little to help improve the u s trade deficit or buoy the economy the house of representatives is expected to vote tomorrow to approve a trillion dollar budget blueprint for the coming fiscal year that reduces the deficit by billion dlrs similarly the senate budget committee has approved a plan that would cut federal red ink by about billion dlrs next year in terms of the economy billion dlrs is infinitesimal so cuts of this magnitude will have little impact on the economy and the trade deficit said stanley collander a touche ross federal budget policy analyst at best it will have a small positive effect collander said in an interview federal reserve board chairman paul volcker has repeatedly told congress that cutting federal red ink would go a long way to help reduce the massive trade deficit and also help ease some of the downward pressure on the value of the dollar the u s government has attempted to remedy the trade imbalance by driving down the value of the dollar but volcker has warned that a further fall in the dollar s value is fraught with danger such a decline he has said could refuel inflation as imported goods become more expensive and chase away foreign capital needed to finance the federal budget deficit in addition in february u s officials meeting with other major industrialized nations in paris agreed that the value of the dollar had dropped enough and that world exchange rates should be stabilized at around current levels as part of that agreement japan and west germany agreed to take steps to stimulate their economies and the united states agreed to cut its budget deficit the alternative to driving down the dollar any further as a way to deal with the trade deficit volcker said recently is to reduce u s consumption particularly federal spending if you don t deal with the budget deficit everything else you do is going to be counterproductive volcker said in recent testimony before the senate banking committee volcker also said he would prefer to further tighten the government s purse strings than have the fed tighten the credit supply if action was needed to fight inflationary pressures or to assure the continued flow of foreign capital into the united states analysts say that fed tightening now could choke off the current modest economic expansion and threaten a recession kemper financial services economist john silvia stressed that any deficit reduction was better than none but he said the size of the cuts under consideration were not enough to give the federal reserve board the flexibility it needs to steer the economy or to keep the value of the dollar from plunging further in world exchange markets there s no doubt that some deficit reduction helps but if your objective is to stabilize the dollar and perserve the fed s flexibility to conduct monetary policy then the answer is it s not enough silvia told reuters the u s trade deficit has become one of the government s most vexing and persistent problems the deficit was billion dlrs and there is as yet little indication that this year s figure will be any lower though administration officials have predicted it will drop by about to billion dlrs by year s end in the past volcker has joked that he never lost sleep worrying whether congress would cut too much fat from the federal budget on the other hand he also has made it clear he is not attached to the gradually declining deficit ceilings set for the period by last year s gramm rudman balanced budget law while the new law set a ceiling of billion dlrs for next year s federal deficit both the house and senate budget committees have conceded that their budget plans would fall short of the deficit reduction goal by about billion dlrs for political reasons to billion dlrs is about the most you re going to get out of congress at the present time said touche ross s collander to do something more than that would be extraordinary remarkable and very very difficult collander said the real danger for congress was to end up short of the deficit reduction goal set by its budget panels to an extent this has become the minimum acceptable reduction level he explained anything less than that will now look like a failure to wall street the budget plan now under debate on the house floor would lower an estimated billion dlr deficit for the year beginning on october one to about billion dlrs by cutting defense and domestic programs by billion dlrs from their anticipated spending levels for next year the senate budget committee has called for a deficit of nearly billion dlrs with about billion dlrs in new taxes and about the same amount in spending cuts reuter soviet trade deficit with west soars in the soviet trade deficit with the west almost quadrupled last year reaching billion roubles compared with mln in official figures showed statistics published by the monthly journal foreign trade showed soviet trade turnover for fell to billion roubles from billion the previous year a drop of pct moscow s trade surplus with east bloc countries continued to grow in western analysts attributed the deficit rise with the west to the world oil price slump which hit moscow s main export and cut hard currency earnings needed for purchases in the west reuter canada february trade surplus billion dlrs after january mln dlrs surplus canada february trade surplus billion dlrs canada had a trade surplus of billion dlrs in february compared with an upward revised mln dlrs surplus in january statistics canada said the january surplus originally was reported at mln dlrs the february surplus last year was mln dlrs february exports seasonally adjusted were billion dlrs against billion in january and billion in february february imports were billion dlrs against billion in january and billion in february reuter ec launches anti dumping probe on japanese chips the european community launched an investigation into allegations of dumping by japanese semiconductor makers in a move which diplomats said could mark an intensification of world trade strains tokyo already faces a deadline of april from washington for the imposition of mln dlrs worth of tariffs on chips it imports into the u s the ec executive commission said today the european electrical component manufacturers association complained that japanese firms were selling high capacity eprom type erasable programmable read only memory chips at unfairly low prices japan last year took pct of the mln dlr ec eprom market up from pct in the ec firms said they had been forced to offer their products at a discount of up to pct in order to compete with the japanese the commission said it believed the association had given sufficient elements of proof for dumping to warrant an investigation which could lead it to impose duties if it found the complaints were justified the commission claims last year s accord between the u s and japan on microchip pricing gives u s firms privileged access to the japanese market reuter swiss to launch new series of money market paper the swiss federal government will launch a new series of three month money market certificates totalling around mln swiss francs the national bank said subscriptions close april and payment date is april the last series of three month paper issued in march raised mln francs at an issue price of pct giving an average annual yield of pct reuter finance ministers agree on need for stability finance ministers from seven major industrialized nations agreed on the need to stabilize currencies at current levels but said more action was needed to reduce trade imbalances and sustain economic growth in a communique issued after a four hour meeting at the u s treasury that ended last night the ministers said the value of the dollar and other currencies was basically correct now and they welcomed new measures planned by the japanese to boost their economy west german finance minister gerhard stoltenberg called it a good meeting and in brief remarks exchanged with reporters other ministers seemed pleased with its outcome shortly after the communique was issued and just as foreign exchange trading opened in tokyo the bank of japan intervened again to prevent the yen rising too quickly the communique said the ministers and governors reaffirmed the commitment to the cooperative approach agreed at the recent paris meeting they agreed however that further actions will be essential to resist rising protectionist pressures sustain global economic expansion and reduce trade imbalances it welcomed the plans set this week by the japan s ruling liberal democratic party to stimulate its economy with what the communique termed extraordinary and urgent measures including an unprecedented front end loading of public works expenditures the meeting of the so called group of seven brought together ministers and central bank governors of the seven major industrial democracies the united states japan west germany france britain italy and canada the communique said the ministers reaffirmed the commitment on cooperation reached in a meeting on february in paris when they had agreed to stabilize foreign exchange rates at the then current levels in the weeks that followed the dollar continued to fall against the japanese yen despite massive dollar purchases by the bank of japan and other central banks and is now trading at around postwar lows japan has come under growing criticism from both the united states and european countries for its only modest efforts to open its markets to outside competition and to reduce its exports the communique said japan affirmed its intention to open domestic markets to foreign goods and services but did not elaborate it said the officials reaffirmed the view that around current levels their currencies are within ranges broadly consistent with economic fundamentals and the basic policy intentions outlined at the louvre meeting reuter g wants to show markets its resolve miyazawa japanese finance minister kiichi miyazawa said the group of seven g countries reaffirmed their paris accord on stabilising currencies to convince the market of their resolve at a news conference after today s g meeting miyazawa said the ministers and central bank governors did not believe a totally new statement was needed the speculative selling did not reflect economic fundamentals and since the fundamentals had not changed only a reaffirmation of the goals of the paris accord was needed he said he also noted that this test of the g nations resolve had concentrated on the yen while other currencies especially the mark had remained stable miyazawa said any change in economic conditions since the paris accord was not worth being called fundamental as i said at a time of louvre agreement the expression of current level is rather vague idea he said the yen s movement in the past several weeks is within the range agreed in paris in febraury he said it was better to give a vague expression than pin pointing a level which could have an adverse impact on the market miyazawa said asked why only japan was committed to fresh measures in the statement he said japan was exceptional among the seven because the yen appreciated against the dollar while other major currencies largely have been stable he also said japan s ruling liberal democratic party has justed adoped a package to reflate the economy while other nations are not supposed to produce new measures in a short period since the paris agreement miyazawa also said the u s sanctions against japanese semiconductor products was not discussed through the g meeting and did not affect the currency talks the seven nations discussed the debt problems of developing countries and ways to proceed in line with the debt initiative outlined by u s treasury secretary james baker months ago reuter u k money market deficit revised downward the bank of england said it has revised its estimate of today s shortfall to mln stg from mln before taking account of mln stg morning assistance reuter u k money market deficit removed the bank of england said it has satisfied its revised estimate of today s shortfall in the money market providing mln stg assistance in afternoon operations the bank bought in band one mln stg bank bills at pct and in band two mln stg bank bills and one mln stg treasury bills at pct this brings the total help so far today to mln stg compared with its deficit estimate of mln stg reuter lebanese pound falls sharply against dollar the lebanese pound fell sharply against the u s dollar again today with dealers attributing the decline to continued political uncertainty the pound closed at against the dollar compared to yesterday s close of political deadlock is reflected in the pound s position there was more demand and less on offer in the market one dealer told reuters the pound which was at to the dollar in january has lost more than pct of its international value over the past three months reuter group of welcomes latest g agreement the group of developed nations issued a communique welcoming the reaffirmation of the paris accord on currency stability by the group of seven leading industrial democracies yesterday in the communique issued this morning the g said prospects of member countries economies would be improved by stability in the exchange rates of their currencies the g includes the group of seven the united states canada britain japan italy west germany and france plus belgium the netherlands sweden and also switzerland sources who attended the g conference this morning said the reference to the latest g agreement was especially added to the brief communique because currency stability will benefit all the g members the g met briefly before the international monetary fund interim committee meeting scheduled for today reuter lawson sees no change in u k monetary policy british chancellor of the exchequer nigel lawson said he saw no immediate implications for british monetary policy arising from the group of seven meeting yesterday exchange rate stability is in the u k s interest he told journalists asked what it meant for u k monetary policy he said no i do not think there are any immediate implications reuter u s treasury s baker says rate shifts orderly treasury secretary james baker said that changes in exchange rates have generally been orderly and have improved the prospects for a reduction in external imbalances to more sustainable levels in remarks before the imf s policy making interim committee baker reiterated a group of seven statement last night that the substantial exchange rate changes since the plaza agreement months ago have now brought currencies within ranges broadly consistent with economic fundamentals baker said these exchange rate shifts have generally been orderly and have improved prospects for the reduction of external imbalances to more sustainable levels as they are today the trade and current account imbalances simply are not sustainable baker told the ministers he said that the reagan administration was resisting strong domestic pressure for trade protection and was working closely with the u s congress in crafting a trade bill while we cannot yet be sure of the outcome we are doing what we can to ensure that the bill is not protectionist he said baker also urged the international monetary fund s executive board to review possible modifications to the fund s compensatory financing facility before the annual meeting this fall we should pay particular attention to the lack of continuing conditionality associated with the use of the cff and to whether shortfalls in export earnings are indeed temporary he said reuter sprinkel says tax hike would not reduce deficit council of economic advisers chairman beryl sprinkel said the reagan administration remains strongly opposed to a tax increase including billion dlrs of new revenues in the budget plan by congressional democrats we believe that significant increases in taxes would not reduce deficits and could have adverse effects on growth sprinkel told the house rules committee he said the administration wanted to continue its policy of gradually reducing deficits through restraining government spending and promoting economic growth sprinkel said cutting the budget deficit was the best way to lower the trade deficit reuter france s balladur says target zone notion nearer french finance minister edouard balladur said that the financial community is closer to arriving at a system of target zones for currencies despite the fact that little is being said about them speaking with reporters at the semiannual meetings of the international monetary fund balladur said we are not very far from the notion of target zones even if we don t say so he told reporters that our ideas are progressing adding that the finance ministers have been talking about more cooperation on economic policies and on levels around which currencies should stabilize reuter canada trade rise seen as start of recovery canada s trade picture has brightened considerably underscoring economists predictions the sector would post a long awaited recovery this year the federal government reported today that the monthly surplus soared to billion canadian dlrs in february double january s mln dlrs surplus and sharply higher than february s mln dlr tally hopefully it s the beginning of a trend said richardson greenshields of canada ltd economist susan clark in toronto economists generally don t expect such large gains over the next months but are looking for an upward trend throughout the year we thought the trade balance would improve over the year and it certainly looks as if this morning s figure is indicative of that commented economist james donegan at the toronto securities firm of midland doherty ltd statistics canada reported the surplus was driven by a pct gain in automobile product exports to a record billion dls in the month recovery in the automotive sector helped push the value of exports up by pct in february the agency said in its monthly report total exports expanded to billion dlrs from billion dlrs in february while imports slipped to billion dlrs from billion dlrs economists have predicted the trade surplus would end up three to five billion dlrs higher than last year s dismal billion dlr total in the surplus was billion dlrs money market analysts said the positive trade news touched off a modest rally in the canadian dollar which rose to u s cts on north american markets early this morning after closing at cts wednesday the currency was hovering around cts in early afternoon trading economists have been banking on an improved trade performance this year to stimulate an otherwise sluggish canadian economy money market analysts said the positive trade news touched off a modest rally in the canadian dollar which rose to u s cts on north american markets early this morning after closing at cts wednesday the currency was hovering around cts in early afternoon trading economists have been banking on an improved trade performance this year to stimulate an otherwise sluggish canadian economy they say the country s consumers who have been spending at a torrid pace in recent years will sharply curtail outlays this year and this should help curtail the flow of imports into the country meanwhile demand for canadian exports in the united states by far the country s largest market is expected to be strong as a result of a projected rise in american consumer spending and the relatively low value of the canadian currency we maintain what s going to drive canada s export performance is income growth in the u s said midland s donegan but at the bank of nova scotia deputy chief economist warren jestin was less optimistic about the u s outlook and said it could be a mistake to read too much into february s trade upturn jestin said given the fact the u s economy is showing signs of weakening particularly car sales it would indicate that part of the strength in canada s trade figures is probably transitory reuter u s oil dependency seen rising to record level the united states dependency on foreign oil sources may reach record levels by the mid s according to john h lichtblau president of petroleum industry research associates lichtblau speaking at an alternative energy conference here said the u s may depend on foreign suppliers for as much as pct of its oil by surpasssing the previous high level of pct in the long term growth in dependency on foreign oil is inevitable lichtblau said as much as pct of u s oil imports in could come from opec nations he said lichtblau said the u s depended on foreign suppliers for pct of its oil in and predicted that would increase to pct by however the rate of this growth can be affected positively or negatively through government action or inaction lichtblau said he said that one of the government s negative actions is the maintenance of the windfall profits tax which acts as a disincentive to developing existing fields and reduces cash flow for oil exploration lichtblau called for the adoption of an international floor price for crude oil to help stabilize world oil prices an international floor price adopted by all or most industrial countries would clearly be a much more effective measure and would be much less distortive for the u s than if we imposed it alone lichtblau said development of alternate energy sources such as synthetic fuels as well as increased development in alaska could lessen u s dependency on foreign oil lichtblau said a potential for alternative supplies could limit the willingness of opec nations to raise oil prices he said lichtblau also called for the federal government to offer tax abatements for oil drilling to fill the strategic petroleum reserve at a faster rate and to develop pilot plans for alternative energy reuter la land llx du pont dd get exploration tracts louisiana land and exploration co said it du pont co s conoco inc subsidiary and oranje nassau energie b v have been offered four exploration blocks offshore the netherlands louisiana land said blocks q a e c and e b were offered to the group in which conoco has a pct interest louisiana land pct and orange nassau pct while this group along with a consortium headed by pennzoil co pzl were offered block q c the offers were the result of applications submitted to the ministry of economic affairs for the netherlands sixth offshore licensing round louisiana land said the conoco group intends to provide a formal acceptance of the blocks with plans to start exploration this year the company also said the two q blocks immediately offset other offshore blocks on which hydrocarbons have been found in commercial quantities reuter treasury s baker says floating exchange rate system needs greater stability crude oil netbacks up sharply in europe u s crude oil netback values in complex refineries rose sharply in europe and firmed in the u s last friday from the previous week but fell sharply in singapore according to calculations by reuters pipeline the firmer tone to refining margins in europe and the u s relected higher prices for petroleum products particularly gasoline and support from crude oil prices netback values for crude oil refined in northern europe rose substantially following strong gains in gasoline prices there brent is valued at dlrs up cts a barrel or three pct from the previous week in the u s gulf sweet crudes rose in value by cts to dlrs for west texas intermediate up about pct sour grades in the u s gulf showed an increase of cts a barrel for alaska north slope up pct but netbacks for crude oil refined in singapore fell sharply down cts to as much as cts a barrel as ample distillate supplies weighed on petroleum product prices attaka in singapore is valued at dlrs a decline of cts a barrel or pct from the previous week for refineries in the mediterranean netback values were mostly lower with declines of seven to cts the value of kuwait crude fell cts to dlrs while iranian light fell cts to dlrs on the u s west coast netback values for ans cif l a also jumped sharply up cts a barrel or pct to dlrs on higher gasoline prices reuter treasury s baker says system needs stability treasury secretary james baker said the floating exchange rate system has not been as effective as had been hoped in promoting stability and preventing imbalances from emerging in the global economy in remarks before the afternoon session of the international monetary fund s interim committee baker said he was not suggesting that the system should be abandoned but i do suggest he said that we need something to give it more stability and to keep it headed in the right direction when the wind shifts he said that indicators can serve as a kind of compass but added that structural indicators can help focus attention on some policies baker however said the imf needs to move beyond macroeconomic indicators and find structural indicators that can help focus attention on some of the policies of specific relevance to the imbalances we face today the treasury secretary said that indicators should be given a more prominent role in the annual economic reviews article iv consultations that the fund performs baker also told the policy making group that it was time for the imf to adopt earlier recommendations making imf surveillance more relevant to national policymakers and the public in particular we urge increased publicity for imf appraisals developed in article iv consultations the use of follow up reports on country actions to implement imf recommendations and greater use of special consultation procedures he said baker emphasized that indicators were a device for moving beyond rhetoric to action he said they provide more structure to the system and induce more discipline and peer pressure into the process of policy coordination he said the fund s procedures for surveillance need to be reviewed and updated to reflect the use of indicators this should be matter of priority for the executive board he said baker also urged the fund to develop alternative medium term economic scenarios for countries that can help us focus even more clearly on the most important imbalances by identifying options for addressing them and analyzing the implications of these options he said also that further work should be done on finding paths that lead toward possible medium term objectives if we are to take effective remedial action when there are significant deviations from an intended course then we must have more definitive ways of indentifying the right course for key variables he said reuter chilean trade surplus narrows slightly in february chile s trade surplus narrowed to mln dlrs in february from mln dlrs in the same month last year but it was above the mln dlr surplus recorded in january the central bank said exports in february totalled mln dlrs pct above the january figure imports fell pct from the previous month to mln dlrs the figures for the same month last year were mln and mln dlrs respectively the accumulated trade surplus over the first two months of stands at mln dlrs against mln dlrs the previous year reuter ecuador crude oil output to resume next month ecuador is due to resume limited crude oil output on may when a new km pipeline to neighbouring colombia should be finished an energy ministry spokesman said oil output was halted on march by an earthquake which damaged km of the main pipeline linking jungle oilfields at lago agrio to the ecuadorean port of balao on the pacific about km of the new link capable of carrying some barrels per day bpd has been built he said ecuador pumped to bpd before the earthquake the new link will connect lago agrio to puerto colon in colombia the starting point of columbia s pipeline to the pacific ocean port of temuco the government estimates it will take about four more months to repair the lago agrio to balao pipeline and return output to normal levels the spokesman said reuter japan warns u s it may retaliate in trade dispute japan warned the united states it may take retaliatory measures if the united states imposes its planned trade sanctions on april a senior government official said shinji fukukawa vice minister of the international trade and industry ministry said in a statement japan would consider measures under the general agreement on tariffs and trade and other actions if the united states imposes pct tariffs on some japanese exports as planned next week however fukukawa said japan was ready to continue trade talks with the united states despite its failure to convince america to call off the threatened tariffs during two days of emergency talks which ended in washington yesterday last month president reagan announced the sanctions in retaliation for what he called japan s failure to honour a july agreement to stop dumping computer microchips in markets outside the united states and to open its home market to american goods fukukawa said the united states had regrettably not listened to japan s explanation of its efforts to live up the pact and said washington had not given any detailed explanation of why it planned to impose the tariffs reuter taiwan announces new round of import tariff cuts taiwan announced plans for another round of import tariff cuts on foreign goods shortly before trade talks with washington which officials described as a move to help balance trade with the united states wang der hwa deputy director of the finance ministry s customs administration department told reporters the list of products included items asked by washington the move is part of our government efforts to encourage imports from our trading partners particularly from the united states he said he said the ministry sent a proposal today to the cabinet that the tariffs on such products as cosmetics bicycles apples radios garments soybeans and television sets be cut by between five and pct the cabinet was expected to give its approval next thursday and the new tariff cuts would be implemented possibly starting on april he added taiwan introduced a sweeping tariff cut on some foreign products last january aimed at helping reduce its growing trade surplus with the united states the island s largest trading partner washington however was not satisfied with the cuts and pressed for more reductions as a way of cutting its huge trade deficit with taipei washington s deficit with taipei rose to a record billion u s dlrs last year from billion in it widened to billion in the first quarter of from billion a year earlier taiwan s official figures show today s announcement came before a departure later today of a member taiwan delegation for washington for a series of trade talks with u s officials the delegation s leader vincent siew told reporters last night he was leaving with a heavy heart meaning that he would face tough talks in washington because of rising protectionist sentiments in the u s congress taiwan s trade surplus with washington was the third largest after japan and canada siew said the talks starting on april would cover u s calls for taiwan to open its market to american products purchases of major u s machinery and power plant equipment import tariff cuts and protection of intellectual property i am afraid this time we have to give more than take from our talks with the u s he said without elaborating reuter british minister says he warned tokyo of sanctions a british minister said he had given the japanese government a clear warning of sanctions against japanese companies if tokyo did not allow more access to its internal markets and it was clearly understood corporate affairs minister michael howard said on his return from a visit to japan he thought the japanese were beginning to appreciate the need to be fair and open about access to their own markets at an airport news conference howard denied opposition charges that his trip had been a failure because he had returned empty handed i did what i set out to do i was sent to deliver a clear message to the japanese government and i delivered it very clearly and it has been clearly understood howard said that under the financial services act the govenment had considerable flexibility in taking sanctions against japanese companies and finance houses operating in britain it is not simply a question of withdrawing or refusing operating licences we can ban firms from certain countries from carrying out certain kinds of business while allowing them to carry out other kinds i hope we don t have to use these powers but i made it clear in japan that if our timetable isn t met we shall use them he said it would be unfortunate if britain and japan became involved in a tit for tat exchange adding that japan gained more than anyone else from an open trading relationship i think they are beginning to appreciate that if this relationship is to continue it is very important for them to be fair and open about access to their own markets on the question of the british firm cable and wireless plc cawl l which is trying to win a significant share of telecommunications contracts in japan howard said he had told the japanese this was being widely regarded as a test case he said there were signs of movement on the case cable and wireless was due to take part in talks in japan next tuesday he said earlier this week british prime minister margaret thatcher said britain could not go it alone on sanctions against japan but would have to coordinate action with its european community partners community sources said after a meeting of trade officials yesterday that the group might impose steep new tariffs on a range of japanese goods to prevent diversion from united states markets if washington imposes trade sanctions against tokyo as it has threatened reuter singapore external trade gains pct in quarter singapore s external trade grew pct in first quarter against a pct decline in the same period last year and two pct growth in the previous quarter the trade development board said it said exports over the period rose by pct to billion dlrs and imports by pct to billion for a trade deficit of billion against a billion deficit in the same period and billion deficit previously the growth was attributed to the strength of non oil trade especially computers and computer parts electronic components and garments it said reuter malaysia s manufacturing exports rise pct malaysia s manufacturing exports rose by pct to billion ringgit in chairman of the export promotion council ahmad sarji abdul hamind said the improved export performance was led by electrical and electronic products textiles footwear clothing processed food timber chemical and rubber products he told a news conference however total gross exports for the year declined by pct to billion ringgit from billion in due to a fall in major commodity exports and weak prices he said reuter u k money market deficit forecast at mln stg the bank of england said it forecast a shortage of around mln stg in the money market today among the main factors affecting liquidity bills maturing in official hands and the take up of treasury bills will drain some billion stg partly offsetting these outflows a fall in note circulation will add some mln stg exchequer transactions around mln and bankers balances above target about mln reuter trade issues straining ec s patience with japan member states of the european community are starting to run out of patience with japan which they believe has repeatedly promised major initiatives to open its market to imports but as often made only minor moves diplomatic sources here said several recent actions by ec countries bear witness to a new disillusionment with the willingness or at least the ability of the japanese government to reduce its massive trade surplus with the ec however they said an all out trade war may be far off as ec states know they would suffer almost as much as japan senior ec diplomats gave a generally favourable reaction to an ec executive commission proposal under which the ec could raise tariffs on a range of japanese products if the u s carries out a threat to make a similar move on april the ec tariffs which would involve renouncing obligations entered into with the world trade body gatt would be designed to stop a diversion of exports to the ec market from that of the u s the diplomats were meeting as tokyo announced that the ec s trade deficit with japan reached a record billion dlrs in march up from billion in february in japanese exports to the ec totalled billion dlrs up pct from while ec exports to japan fell one pct to billion dlrs in paris trade minister michel noir said france has decided to give japan a taste of its own medicine burgeoning imports of microwave ovens and of frozen coquilles st jacques will be restricted by a strict application of french quality standards something ec states say often happens to their own exports entering japan britain has threatened to withdraw the licences of japanese banks and insurance companies to operate in the city of london because the british cable and wireless company lost out in competition for a japanese telecommucations contract however british officials in london have said that the government may have gone too far in implying that it would take immediate drastic action unless the contract was reopened by contrast west germany with the ec s most successful economy has never threatened tokyo with sanctions preferring to rely on firm diplomacy and encouragement of its own industries to surmount obstacles to export to japan the ec commission itself has switched its tactics in recent years substituting general calls for action by japan to open its market with specific demands for moves in key areas at present it is for instance pressuring japan to end allegedly discriminatory taxation of imported wines and spirits to ensure ec companies have a chance to win contracts for the building of a new international airport and to simplify certification and safety checks on imported cars ec officials say these tactics yield some benefits but often the japanese announce modifications of their non tariff barriers which open the door to imports by only a token amount they stress however that any action must be taken by the ec as a whole to stop beggar my neighbour action one of the problems britain could face if it were to withdraw licences for japanese banks would be that the bankers would be welcomed with open arms in frankfurt or amsterdam they point out reuter kenya devalues shilling by pct against sdr kenya devalued the shilling by pct against the special drawing right sdr in response to the decline of the dollar last last week bankers said the central bank of kenya set the shilling at to the sdr compared with the rate in force since the last devaluation on march the kenyan shilling has lost pct of its value against the sdr this year in a series of devaluations designed to keep the value of the dollar above shillings reuter bank of japan to sell billion yen in bills the bank of japan will sell billion yen in deficit financing bills today through day repurchase agreements maturing june to help absorb a projected money market surplus money traders said the operation will raise the outstanding supply of the bills to a record billion yen the yield on the bills for sale to banks and securities houses from money houses will be pct compared with the two month commercial bill discount rate today of pct and the two month certificate of deposit rate of pct the traders estimated the surplus today at about billion yen they said it is mainly due to billion yen of government tax allocations to local governments and public entities and to excessive banking system cash holdings due to continuous large central bank dollar purchases reuter u k money market given mln stg assistance the bank of england said it had provided the money market with mln stg help in the morning session this compares with the bank s estimate that the system would face a shortage of around mln stg today the central bank bought bank bills outright comprising two mln stg in band two at pct mln stg in band three at pct and mln stg in band three at pct reuter zambia s kwacha falls at weekly auction the zambian kwacha fell at this week s foreign exchange auction to kwacha to the dollar from last week s the bank of zambia said the rate was the lowest since the auctions resumed two weeks ago under a new two tier exchange rate system worked out with the world bank and international monetary fund the bank of zambia said it received bids ranging from to kwacha for the six mln dlrs on offer one hundred and thirty five bids were successful a british high commission spokesman said britain would put eight mln stg into the auction at a rate of one mln a week as soon as zambia reached a full agreement with the imf the money could be spent only on goods produced and supplied by british firms excluding luxuries and defence equipment the spokesman added reuter u k money market given further mln stg help the bank of england said it provided the market with a further mln stg assistance this afternoon bringing its total assistance on the day to mln stg shortly before the bank said it had revised its estimate of the shortage up to mln stg from the earlier forecast of mln during the afternoon the bank bought mln stg of band two bank bills at pct and two mln stg of local authority bills plus mln stg of bank bills in band four at pct these rates were in all cases unchanged from previous intervention levels reuter trade issues straining ec s patience with japan member states of the european community are starting to run out of patience with japan which they believe has repeatedly promised major initiatives to open its market to imports but as often made only minor moves diplomatic sources here said several recent actions by ec countries bear witness to a new disillusionment with the willingness or at least the ability of the japanese government to reduce its massive trade surplus with the ec however they said an all out trade war may be far off as ec states know they would suffer almost as much as japan senior ec diplomats gave a generally favourable reaction to an ec executive commission proposal under which the ec could raise tariffs on a range of japanese products if the u s carries out a threat to make a similar move on april the ec tariffs which would involve renouncing obligations entered into with the world trade body gatt would be designed to stop a diversion of exports to the ec market from that of the u s the diplomats were meeting as tokyo announced that the ec s trade deficit with japan reached a record billion dlrs in march up from billion in february reuter ec could decide on japan trade moves in late may the european community ec has effectively given japan six weeks to take moves to open its market to imports before it decides on possible tough retaliatory trade measures ec diplomats said they said ec foreign ministers will meet on may and to review the state of trade relations between the two sides the ec executive commission was asked by representatives of member states on friday to propose a renunciation of some ec pledges to the world trade body gatt unless there are adequate and early measures to open the japanese market such a renunciation would be the first step to imposing stiff increases in duties or quantitative limits on japanese exports the diplomats said it was unlikely that the issue would be discussed in detail at the next meeting of ec foreign ministers on april and in luxembourg as time was needed to prepare proposals for possible retaliatory action they said the commission has powers to take some limited action before getting ministerial approval to prevent japanese exports of electrical photographic and other goods being diverted to europe following of possible u s tariff moves in may the ministers are also likely to discuss how to prevent japan from getting an extra trading advantage as a result of spain and portugal joining the bloc which obliges them gradually to reduce tariffs on many industrial goods japan s trade surplus with the community has grown steadily registering a record billion dlrs in march reuter u k money market given late help of mln stg the bank of england said it gave the market late assistance of around mln stg bringing its total help on the day to some mln stg this compares with the bank s estimate of the liquidity shortage of around mln stg raised from its early forecast of mln stg reuter fed expected to set three day repurchase pacts the federal reserve is expected to enter the u s government securities market to add temporary reserves directly by arranging three day system repurchase agreements economists said they said the fed may add the reserves indirectly instead via a large round two billion dlrs or more of customer repurchase agreements federal funds which averaged a high pct on friday opened at pct and traded between there and pct reuter taiwan announces new round of import tariff cuts taiwan announced plans for another round of import tariff cuts on foreign goods shortly before trade talks with washington which officials described as a move to help balance trade with the united states wang der hwa deputy director of the finance ministry s customs administration department told reporters the list of products included items asked by washington the move is part of our government efforts to encourage imports from our trading partners particularly from the united states he said he said the ministry sent a proposal today to the cabinet that the tariffs on such products as cosmetics bicycles apples radios garments soybeans and television sets be cut by between five and pct the cabinet was expected to give its approval next thursday and the new tariff cuts would be implemented possibly starting on april he added taiwan introduced a sweeping tariff cut on some foreign products last january aimed at helping reduce its growing trade surplus with the united states the island s largest trading partner washington however was not satisfied with the cuts and pressed for more reductions as a way of cutting its huge trade deficit with taipei washington s deficit with taipei rose to a record billion u s dlrs last year from billion in it widened to billion in the first quarter of from billion a year earlier taiwan s official figures show today s announcement came before a departure later today of a member taiwan delegation for washington for a series of trade talks with u s officials the delegation s leader vincent siew told reporters last night he was leaving with a heavy heart meaning that he would face tough talks in washington because of rising protectionist sentiments in the u s congress taiwan s trade surplus with washington was the third largest after japan and canada siew said the talks starting on april would cover u s calls for taiwan to open its market to american products purchases of major u s machinery and power plant equipment import tariff cuts and protection of intellectual property i am afraid this time we have to give more than take from our talks with the u s he said without elaborating reuter triton oil says paris basin reserves up pct triton energy corp said proven reserves of the villespedue oil field in france s paris basin were estimated at a total of mln barrels on march one up pct from mln barrels on may triton said its pct owned triton europe plc subsidiary has a pct interest in the field which is located miles east of paris the other pct is held by total exploration s a the field s operator reuter u s february trade to be reported on new basis the february monthly merchandise trade figures to be reported tuesday by the commerce department will be on a new basis reflecting more recent data so avoiding future revisions of the monthly figure commerce officials said the overall january deficit of billion dlrs will be revised but the february figure will be a final one officials said previously the initial monthly figure has had to be revised in subsequent months because of the time lag between the report and the compiling of final estimates on imports and exports the reporting of the february trade data was delayed several weeks to permit gathering latest figures on imports and exports to give a clearer picture of the monthly trade balance reuter u s february trade to be reported on new basis the february monthly merchandise trade figures to be reported tuesday by the commerce department will be on a new basis reflecting more recent data so avoiding future revisions of the monthly figure commerce officials said the overall january deficit of billion dlrs will be revised but the february figure will be a final one officials said previously the initial monthly figure has had to be revised in subsequent months because of the time lag between the report and the compiling of final estimates on imports and exports the reporting of the february trade data was delayed several weeks to permit gathering latest figures on imports and exports to give a clearer picture of the monthly trade balance reuter kuwaiti daily says opec credibility at stake opec s credibility faces fresh scrutiny in coming weeks amid signs of a significant rise in supplies of oil to international oil markets the kuwait daily al qabas said in an article headlined gulf oil sources say middle east production up mln bpd it warned opec s official prices could face fresh pressure from international oil companies seeking cheaper supplies it did not say whether only opec or both opec and other producers were behind the reported rise in mideast output nor did it specify if the sources were official or other contacts the sources said the credibility of opec would come under fresh scrutiny from today monday with activity in the european and american markets the daily said the sources were quoted as saying that after opec had in march demonstrated its commitment to quota agreements some members had raised output last week it gave no details dealers in oil markets were now waiting to see if opec was able to control production or whether the days of cheating and producing over quotas has begun anew it said the sources warned that maybe the price of a barrel of oil will fall below perhaps dlrs this week or next if there is no control on supplies it said the sources believed a return of oil below dlrs a barrel may open the doors for international oil companies to pressure opec over contract prices similar to the struggle last march it said apparently referring to resistance by buyers to lift from qatar unless it gave price discounts more than one official has warned opec would find its solidarity under scrutiny by the end of april or start of may it said noting demand usually fell with the onset of summer reuter texaco tx says some oil flows re established texaco inc has re established some key oil supply lines following yesterday s court filing for protection under chapter of the u s bankrupcty code said elton yates texaco s coordinator of worldwide operations several companies say they are willing to start trading yates told reuters in an interview the company last week had stated that a number of domestic and international oil suppliers were demanding cash for oil shipments and in some cases had cut supplies altogether banks had also cut credit lines it said in court filings manufacturers hanover corp mhc and other banks told texaco it would cut off a one billion dlr credit line texaco said in the court filing chase manhattan corp cmb and j p morgan co s jpm morgan guaranty trust co asked for deposits to cover transactions it said the severe conditions with suppliers and creditors arose from an unfavorable ruling last monday by the u s supreme court in texaco s ongoing dispute with pennzoil co pzl over the acquisition of getty oil co in the high court said texas courts must consider texaco s plea to cut its billion dlr bond while appealing the case most of the suppliers stayed with us as long as they could elton said but following monday s supreme court ruling texaco s suppliers began demanding cash and halting supplies it wasn t until last wednesday that it turned into an avalanche he said supplies were cut to the point where we could not run the system at anywhere near capacity he said less than half of texaco s oil supplies had been in jeapordy but the cut off would have produced severe shortages by mid may now the situation appears much less severe elton said it said that sonatrach the algerian national oil company canceled future deliveries of crude oil and natural gas occidental petroleum co oxy demanded cash for crude and atlantic richfield co arc asked for special safeguards the company also said british petroleum co plc bp last week refused to accept an order for fuel oil but yates today said a big u k company has in fact said they would go on supplying they had cancelled last week he declined to identify the company petroleos de venezuela s a the venezuelan state oil company that supplies a large portion of texaco s oil also halted shipments two weeks ago yates said but he added that texaco expected to meet with the venezuelans later today in an attempt to reestablish that key supply line talks were also expected to take place with the algerians he added bankruptcy specialists said it was likely texaco s chapter filing would allow the company to secure its credit lines and oil supplies that are key to the company s business it will be business as usual for texaco said martin klein a bankruptcy attorney at the new york law firm dreyer and traub creditors are a nervous bunch of people he said but when the dust settles they will reevaluate the situation and will likely extend credit to the chapter company but other officials at texaco were not immediately available to say whether discussions were being held with its banks or whether credit lines had been reestablished reuter kuwaiti daily says opec credibility at stake opec s credibility faces fresh scrutiny in coming weeks amid signs of a significant rise in supplies of oil to international oil markets the kuwait daily al qabas said in an article headlined gulf oil sources say middle east production up mln bpd and markets witness new surplus amid whispers of return to cheating days it warned opec s official prices could face fresh pressure from international oil companies seeking cheaper supplies it did not say whether only opec or opec and other producers were behind the reported rise in mideast output nor did it specify if the sources were official or other contacts the sources said the credibility of opec would come under fresh scrutiny from monday with activity in the european and american markets it said the sources were quoted as saying that after opec had in march demonstrated its commitment to quota agreements some members had raised output last week it gave no details dealers in oil markets were now waiting to see if opec was able to control production or whether the days of cheating and producing over quotas has begun anew it reported the sources warned that maybe the price of a barrel of oil will fall below perhaps dlrs this week or next if there is no control on supplies the sources believed a return of oil below dlrs a barrel may open the doors for international oil companies to pressure opec over contract prices similar to the struggle last march it said apparently referring to resistance by buyers to lift from qatar unless it gave price discounts more than one official has warned opec would find its solidarity under scrutiny by the end of april or start of may it said noting demand usually fell with the onset of summer reuter doe resolves issues with royal dutch rd unit the energy department said it had approved in final form an agreement that resolves all remaining issues with shell oil co over oil pricing and allocation controls that ended in under the agreement the royal dutch shell group unit agreed to pay mln dlrs to settle refiner pricing issues and mln dlrs to settle crude oil pricing issues doe said doe said that before making the pact final it modified it to reflect shell s compliance with the tertiary incentive program a provision not in the version published last dec reuter abu dhabi marketing said not breaching opec pact a senior abu dhabi oil official said in remarks published today the emirate largest producer in the united arab emirates uae was succeeding in marketing its crude oil without breaching opec accords khalaf al oteiba marketing director at the abu dhabi national oil co adnoc told the company s petroleum community magazine adnoc was also keen to keep good customer relations the company will maintain its dialogue with and care for its customers in accordance with market conditions and take necessary steps to guarantee marketing its production he said the present oil marketing policy of adnoc is based on adherence to opec decisions of december to control production and establish a new pricing system in an attempt to stabilize the market he added opec agreed last december to limit production to mln bpd and return to fixed prices averaging dlrs a barrel oteiba said stabilization of the oil market in the future depended on how much discipline opec showed oteiba said last year when world oil prices dropped was adnoc s most difficult ever but a practical and flexible pricing policy was implemented to relate to the changed market environment he said crude oil sales last year jumped to an average bpd of which pct was exported refined product sales totalled eight mln metric tonnes of which pct was exported in adnoc marketed a total of bpd of crude oil and mln tonnes of refined products reuter gulf canada goc acquires suez oil stake gulf canada corp said it acquired a pct working interest in the gulf of suez oil concession for undisclosed terms the company said its agreement with operator conoco hurghada inc and hispanoil covered the acre east hurghada offshore concession it said a mln u s dlr four well program was planned for after the acquisition which is subject to egyptian government approval working interests in the hurghada block will be conoco hurghada at pct hispanoil pct and gulf canada the balance reuter texaco filing adds uncertainty in oil market u s oil traders said texaco inc s filing for protection under the chapter bankruptcy code is adding uncertainty to an already skittish oil market but opinions are divided on the impact to the market the filing is holding up wet barrel trading today said one trader everyone is talking about it assessing their company s situations in relation to texaco he added some traders said companies that deal with texaco are concerned about whether they will receive payment or supplies under the bankruptcy filing however others were less worried the first paid will be the trading community and those connected with texaco in the shipping industry one new york trader said if texaco doesn t get crude supplies it can t run its refineries so its other assets would not be worth anything he added texaco filed for protection under chapter of the u s bankruptcy code yesterday after failing to reach a settlement with pennzoil on an billion dlrs court award for illegally interferring with pennzoil s proposed purchase of getty oil co however others were less worried the first paid will be the trading community and those connected with texaco in the shipping industry one new york trader said if texaco doesn t get crude supplies it can t run its refineries so its other assets would not be worth anything he added texaco filed for protection under chapter of the u s bankruptcy code yesterday after failing to reach a settlement with pennzoil on an billion dlrs court award for illegally interferring with pennzoil s proposed purchase of getty oil co there is some reluctance to trade with texaco but no great change said another trader adding that traders are tending toward prudence in their dealings with the company traders are assessing whether to require cash prepayment or letters of credit or to continue to trade as usual with texaco on an open line basis he said another trader however described today s activity as business as usual adding that traders feel more secure because no liens can be put on texaco s assets while it is in bankruptcy traders said there was no apparent effect of the texaco filing on crude futures trading although they said the exchange might lower texaco s position limit and require higher margins for texaco s trades new york mercantile exchange president rosemary mcfadden declined to comment on texaco s futures trading saying that is is proprietary information mcfadden did say however that as a matter of procedure it is possible the exchange can lower allowable position limits or increase margin requirements for companies that are in financial trouble reuter ecuador says will resume limited oil production ecuador will resume limited crude output next week to fill up storage tanks as a first step to pump oil to a colombian pipeline on may one the state ecuadorean petroleum corp cepe said cepe manager carlos romoleroux told reporters that ecuador would begin pumping an unspecified amount of crude in northeastern jungle oilfields at the end of next week in preparation to send the oil through a new pipeline link up to neighbouring colombia oil production in ecuador was halted on march five when an earthquake damaged the country s main pipeline from lago agrio at the heart of the ecuadorean jungle oilfields to the pacific port of balao it will take at least until the end of july to repair the pipeline and return output to normal levels the country was pumping between bpd and bpd before the tremor to resume limited output in the meantime ecuador is constructing a mile pipeline linkup capable of carrying bpd from lago agrio to puerto colon the starting point of colombia s pipeline to the pacific port of tumaco the original target date to resume limited crude output was may eight the scheduled date for the inauguration of the lago agrio to puerto colon pipeline an energy ministry spokesman said reuter miyazawa sees eventual lower u s trade deficit japanese finance minister kiichi miyazawa told a press conference he expects the u s trade deficit to eventually start reflecting economic fundamentals which should influence exchange rates the minister was not referring to the u s trade data to be released in washington later today miyazawa also said he told major industrial nations when he was in washington last week that present exchange rates are not necessarily good he had said earlier in washington that current exchange rates were within levels implied in the february paris currency accord reuter bank of japan intervening to support dollar against yen dealers saudi arabia wants to increase oil sales to japan saudi arabia hopes to increase the volume of its oil exports to japan through expanding bilateral trade saudi arabian interior minister naif bin abdul aziz said he told a tokyo reception his country hopes to raise crude and products exports to japan to earlier levels but did not elaborate to promote trade saudi arabia is inviting japanese industries to do business there he said japanese firms now have long term contracts to import a total of barrels per day of saudi crude reuter japan s ldp to call for flexible monetary policies japan s ruling liberal democratic party ldp will call for adequate and flexible management of the nation s monetary polices in its plan to expand domestic demand a senior ldp official told reuters junichiro koizumi the head of the ldp committee working out the plan said the phrase should not be taken as implying an immediate cut in japan s pct discount rate the ldp generally believes that there is no need for a further discount rate cut at the moment he said but koizumi said the ldp does not rule out a rate cut if necessary in the future bank of japan governor satoshi sumita told a press conference on wednesday that the central bank does not have any intention of easing credit conditions reuter japan details plan to stave off trade problems japan s liberal democratic party ldp has drawn up a detailed plan calling for large tax cuts and an increase in government purchases of foreign goods the head of the committee working out the plan junichiro koizumi said the plan will also urge the government to double s official development assistance to billion dlrs within five years instead of seven as the government had promised senior ldp officials said at a press conference ldp executive council chairman shintaro abe will explain the plan to u s officials when he visits the u s on april abe s visit is to prepare for prime minister yasuhiro nakasone s talks with president ronald reagan later this month koizumi said the ldp plan will not specify the size of the tax cut or the amount of domestic demand to be stimulated however top ldp executives will work out figures so that abe will be able to offer specifics to u s officials the proposed increase in procurement of foreign goods by the government will probably include the purchase of super computers ldp officials said specific trade problems with other nations and will encourage flows of funds to developing countries the officials said the ldp expects the measures to prop up the economy and lessen trade problems with the u s they added the basic ideas of the ldp s plan were presented to and welcomed by monetary authorities of the major industrial nations in washington last week they said the ldp plan will form the basis for the last of several packages to stimulate japanese domestic demand and will be unveiled by the government in late may reuter japan farm reform a key to trimming trade surplus basic reform of japan s protected farm sector is a key to shifting its economy away from export to domestic led growth a vital step if it is to trim its trade surplus securities analysts said the farm sector which is protected by import tariffs and quotas propped up by subsidies and price supports and sheltered by the tax system has ample room for change they said in economic terms reform would be a plus said christopher chew of brokerage firm james capel and co the ultimate cost of the existing system is food prices twice those in europe and two to three times those in the u s the analysts said spending on food accounts for about one quarter of the average household s budget and roughly pct of the gross national product gnp according to a study by chew reducing these prices could increase household spending power by five pct his study said the money could be spent on products which would have a more direct impact in boosting domestic growth it added there s a lot of slack a u s government official in tokyo said all that money could be spent on something else direct central government subsidies to the farm sector amount to some five billion dlrs per year independent estimates put total subsidies from all sources as high as billion and the analysts said much of that money is wasted changing tax laws to encourage city residents who only farm on weekends to put their land up for sale for residential development would also give a boost to domestic spending economists said housing construction is the key strategic variable in the expansion of domestic demand wrote chihiro nakajima professor at kyoto gakuen university japanese business groups are calling for staged farm reform to shift some of the burden of trade friction and economic restructuring away from the manufacturing sector and onto the farm sector employers groups also want change if you really want to expand domestic demand the way to do it is not to raise wages recklessly but to reduce commodity prices bumpei otsuki president of the japan federation of employers associations told a recent press conference external pressures are rising as the u s and europe seek removal of tariffs and quotas to help reduce their trade deficits with japan but vested japanese interests opposed to change remain well entrenched dimming prospects for quick reform analysts said although the full time farm population is falling and there are signs the ldp is paying more attention to urban constituencies the ruling party remains heavily dependent on farm votes in the rural areas one rural vote is worth several city votes due to the pattern of constituency borders the ldp is already in political trouble over its tax reform plan and does not want to raise another sticky issue so soon the analysts said consumer groups are politically weak and tend to accept the traditional view that higher prices are a small fee to pay for national food security they said powerful agricultural cooperatives are fiercely opposed to import liberalisation but are more flexible about reforms aimed at stepping up productivity they said reform when it comes will be in response to specific pressure rather than an all embracing program said chew reuter japan details plan to stave off trade problems japan s liberal democratic party ldp has drawn up a detailed plan calling for large tax cuts and an increase in government purchases of foreign goods the head of the committee working out the plan junichiro koizumi said the plan will also urge the government to double s official development assistance to billion dlrs within five years instead of seven as the government had promised senior ldp officials said at a press conference ldp executive council chairman shintaro abe will explain the plan to u s officials when he visits the u s on april abe s visit is to prepare for prime minister yasuhiro nakasone s talks with president ronald reagan later this month koizumi said the ldp plan will not specify the size of the tax cut or the amount of domestic demand to be stimulated however top ldp executives will work out figures so that abe will be able to offer specifics to u s officials the proposed increase in procurement of foreign goods by the government will probably include the purchase of super computers ldp officials said according to the plan japan will also strive to solve specific trade problems with other nations and will encourage flows of funds to developing countries the officials said the ldp expects the measures to prop up the economy and lessen trade problems with the u s they added the basic ideas of the ldp s plan were presented to and welcomed by monetary authorities of the major industrial nations in washington last week they said the ldp plan will form the basis for the last of several packages to stimulate japanese domestic demand and will be unveiled by the government in late may reuter baldrige to launch far east trade drive u s commerce secretary malcolm baldrige leaves on saturday on a day trip to the far east to help spur u s trade and improve business relations with china south korea and the philippines u s officials say baldrige will also stop in hong kong to meet british officials and local u s and hong kong businessmen the u s last year had major deficits with three of its asian trading partners south korea billion dlrs hong kong billion and china billion the deficit with the philippines was mln dlrs baldrige will meet south korean president chun doo hwan and trade minister rha woong bae on monday to discuss opening south korean markets to more u s goods baldrige will be in peking from april to he will meet zheng tuobin minister for foreign economic relations and trade attend a meeting of the u s china joint commission on commerce and trade and address a management and training organisation however u s officials said a chief purpose of baldrige s visit would be to discuss relaxed u s rules for transferring modern technology to chinese industries in hong kong baldrige will hold meetings on april with governor david wilson and trade and industry secretary eric ho as well as addressing the american chamber of commerce u s officials said baldrige will meet philippines president corazon aquino on april to show continued u s support for her government and to discuss steps it could take to improve the atmosphere for american investment he will also will meet finance secretary jaime ongpin and trade and industry secretary jose concepcion reuter reagan to announce decision on japan sanctions president reagan today is to announce a decision on tough new tariffs on japanese exports to retaliate for what he calls japan s failure to end its unfair practices in semiconductor trade the pct tariffs are to be imposed on mln dlrs of japanese goods recommended for curbs by a special panel of experts headed by the u s trade representative s office reagan announced last march he would impose the tariffs on certain goods taken from a list that ranged from computors and television sets to power tools and photographic film the panel this week winnowed through the list of the some products and sent their recommendations yesterday to santa barbara where reagan is vacationing in his march annoucement reagan said i am committed to full enforcement of our trade agreements designed to provide american industry with free and fair trade opportunities he added the tariffs would be lifted once japan honored the pact it signed last year to end dumping semiconductors in world markets and opened its home market to u s products u s officials said japan had done nothing since the march announcement to alter reagan s plan to invoke the sanctions white house spokesman marlin fitzwater said yesterday we do not want a trade war but we feel that this is the kind of action that requires meaningful action reagan s move follows steadily rising u s trade deicits with last year s hitting a record billion about one third of the deficit is in trade with japan congress is weighing a trade bill to force the president to retaliate in certain cases of unfair trade practices he has opposed the legislation saying it would prevent negotiated solutions to trade disputes and in any case that existing law was adqeuate to end unfair trade practices trade experts say his tough action against the japanese was as much to penalize the japanese as to show congress he did not need any new trade legislation the japanese have complained that they have been honoring the semiconductor pact but that it would take time before the results showed up u s officials however have said their monitoring of japanese semiconductor shipments to east asian countries and western europe showed no letup in the dumping and that the japanese home markets remained shut to american exports japan has said that if reagan imposed the tariffs it would file a complaint with the general agreement on tariff and trade gatt it said hoped gatt would find the u s retaliation had violated the regulations of the global trading group and would approve compensation or japanese retaliation u s officials have said they did not think japan would retaliate because it had too much to lose in any trade war with the united states reuter yeutter says japanese curb all but certain u s trade representative clayton yeutter said it was all but certain president reagan would go ahead today and impose curbs on japanese exports as planned asked in a television interview what the chance was for reagan to cancel the scheduled pct tariffs on japanese electronic exports he said slim to none reagan announced on march he would impose the tariffs to retaliate for japan s failure to honor a agreement to end dumping computer semiconductors in world markets at less than cost and to open its home markets to u s products yeutter on the nbc program today said the united states did not want to terminate the agreement and would drop the tariffs once japan began fulfilling the agreement he said japanese negotiators last week told u s officials they were honoring the pact but yeutter said it would take time to monitor any compliance asked how long that would take he said we want to see a pattern of compliance so in a minimum i would say that would take a few weeks yeutter said he did not think there would be much consumer impact by the tariffs on mln dlrs worth of japanese goods because the items selected are also readily available from other countries and manufacturers he said he did not think japan would retaliate it seems to me it is not in the interests of either country to get in an escalating conflict the japanese understand that full well yeutter said he added japan might challenge the tariffs in the general agreement on tariffs and trade gatt but that s more of a paper kind of exercise and i don t really expect to see any adverse impact on u s trade yeutter also said he did not see any way the semiconductor issue could be resolved before or during a washington visit later this month by japanese prime minister yasuhiro nakasone he said he hoped the visit which is to have trade as a major issue would be productive but i don t see any practical way to resolve this particular dispute before or during his visit reuter u s commerce trade report omits freight costs the commerce department said on that insurance and freight costs for imported goods of billion dlrs were included in the february trade deficit of billion dlrs reported on tuesday the department is required by law to wait hours after the initial trade report to issue a second report on a customs value basis which eliminates the freight and insurance charges from the cost of imports private sector economists emphasized that the commerce department was not revising down the deficit by billion dlrs but simply presenting the figures on a different basis a report in the washington post caused a stir in the foreign exchanges today because it gave the impression dealers said that the underlying trade deficit for february had been revised downward the commerce department would like to have the law changed to permit it to report both sets of figures simultaneously my feeling is the second one is a better report but there s legislation that requires us to delay it two days said robert ortner commerce undersecretary for economic affairs but this has been going on for a long time and no one pays any attention to the second figure the billion dlr february trade deficit compared with a revised january deficit of billion dlrs the law requiring a hour delay in publishing the monthly trade figure excluding freight and insurance was passed in reportedly the feeling was the first figure which includes customs freight and insurance allowed a better comparison with other countries that reported their trade balances on the same basis the second figure which would always be lower by deducting freight and insurance presents the deficit in a more favorable light for the reagan administration ortner said he would like to see the law changed to eliminate the hour delay in reporting the two figures we re considering it he said it s one of those dinosaur laws and i think it s time has come the second figure which would always be lower by deducting freight and insurance presents the deficit in a more favorable light for the reagan administration ortner said he would like to see the law changed to eliminate the hour delay in reporting the two figures we re considering it he said it s one of those dinosaur laws and i think its time has come reuter white house says u s monetary policy correct the white house distancing itself from remarks by the administration s budget chief said the federal reserve s current course of monetary policy was appropriate the administration feels that the current course of monetary policy is appropriate white house spokesman marlin fitwater said fitzwater said the administration did not endorse remarks by white house budget chief james miller who said he was concerned the federal reserve might overreact to the decline in the value of the u s dollar by raising interest rates more japanese tariffs seen as worldwide warning the tough trade sanctions president reagan imposed on japanese exports are not only a shot across japan s bow but also a sign reagan will attack unfair trade practices worldwide u s officials said but robert crandall a trade specialist at brookings institution a think tank said a shot across their bow can often result in a shot in our stern he said it left the united states open to retaliation the u s officials said the pct tariffs reagan ordered on mln dlrs worth of japanese goods will also show congress that a tough pro trade stand can be taken under existing laws and no new protectionist legislation is needed in the past year tough trade action had been taken against the european community over corn and sorghum taiwan over beer and wine south korea over counterfeiting of copyrights patents and trademarkets and japan on tobacco white house spokesman marlin fitzwater told reporters the tariffs up from five pct should be seen as a serious signal to other nations on the need for fair trade practices reagan said he imposed the sanctions on certain computers television sets and some hand tools because japan did not honor an agreement to end dumping semiconductors in world markets at less than cost and to open its markets to u s products the tariffs were placed on items which were available from other sources so there would be little effect on the american consumer fitzwater said reagan has come under heavy pressure to take tougher action especially against japan to end global unfair trade practices and reverse the growing u s trade deficit the alternative was that if he did not congress would the u s trade gap last year was a record billion dlrs and continues to rise with japan accounting for about one third of america s overall deficit but there are other two way deficits with canada west germany taiwan and south korea and reagan officials said the president is ready to fight them all reagan said in announcing the sanctions today that i regret that these actions are necessary but that the health and vitality of the u s semiconductor industry was essential to american competitiveness in world markets we cannot allow it to be jeopardized by unfair trading practices reagan added in the statement from his california vacation home at santa barbara he said the tariffs would remain in force until japan abided by the agreement u s officials say the action today will show congress which is about to write a trade bill he does not like that he already has the tools needed to fight unfair trade the white house aide said of the tariff action it wasn t done to appease congress but because there was an unfair trade practice the aide added however on another plane it was an example of how the administration uses the trade law to fight unfair practices an that it is not necessary to make a major overall of our trade laws but the analyst crandall said the tariff action was not in the best interests of the united states and that negotiations should have been pursued to resolve the issue it s very dangerous to go down the retaliatory route he said because it leads to more retaliation and restrictions in trade crandall said the administration is doing this for its political impact across the country and therefore its impact on congress he said i don t think it makes a lot of sense but other analysts said it made little difference whether the tariffs were aimed at u s trading partners or congress and that the main point was that the trading partners were on notice that retaliation was a weapon reagan was ready to use spokesman fitzwater said we don t want a trade war but the imposition of sanctions showed the united states would act when it had evidence that trade pacts were being violated crandall said the administration is doing this for its political impact across the country and therefore its impact on congress he said i don t think it makes a lot of sense but other analysts said it made little difference whether the tariffs were aimed at u s trading partners or congress and that the main point was that the trading partners were on notice that retaliation was a weapon reagan was ready to use spokesman fitzwater said we don t want a trade war but the imposition of sanctions showed the united states would act when it had evidence that trade pacts were being violated reuter yeutter almost sure japan will not retaliate u s trade representative clayton yeutter said he was almost sure japan would not retaliate against tariffs president reagan slapped on mln dlrs of japanese electronic goods today i d say it s plus pct sure that it the tariffs will not provoke a retaliation on american products yeutter told cable news network japan has far too much at stake in this relationship with the united states to seriously entertain thoughts of retaliation yeutter said earlier today reagan imposed pct tariffs on a range of japanese goods in retaliation for japan s alleged violation of a bilateral pact governing semiconductor trade yeutter did say that u s farm products would be targeted if tokyo decided to hit back if they japan were to retaliate it would probably be on something like american agricultural products he said but i really think the chances of that happening are between slim and none he added reuter japan will not retaliate now against u s tariffs japan does not plan to take immediate retaliatory action against implementation of u s tariffs on some japanese electronic goods the minister of international trade and industry hajime tamura said in a statement japan requested bilateral consultations in accordance with article of the general agreement on tariffs and trade gatt in washington yesterday tamura said there was deep regret over the u s measures which will impose pct tariffs on about mln dlrs worth of japanese imports of some small computers colour television sets and power tools reuter ecuador to use colombia oil link for five years ecuador will use a new pipeline link with colombia to export crude oil for the next five years colombian mines and energy minister guillermo perry said the link will be inaugurated on may it was built to allow ecuador to resume exports of crude oil halted on march by earthquake damage to its lago agrio to balao pipeline once that pipeline is repaired ecuador will exceed its opec quota in order to offset lost income and pay debts contracted with venezuela and nigeria since the quake ecuador mines and energy minister javier espinosa said the two ministers were speaking at a news conference after signing an agreement for joint oil exploration and exploitation of the jungle border zone between the two nations drilling will begin in september the agreement to transport ecuadorean crude oil is not only for this emergency period but for the next five years with possibility of an extension between and barrels per day bpd will be pumped along it perry said espinosa said ecuador planned to pump mln barrels through the link in the next five years at a cost of cents per barrel during the first year the km link with a maximum capacity of bpd will run from lago agrio the centre of of ecuador s jungle oilfields to an existing colombian pipeline that runs to the pacific port of tumaco espinosa said the km stretch of the link built on the ecuadorean side cost mln dlrs perry gave no figures for colombia s km segment but said it was insignificant compared with what we are going to earn opec member ecuador was pumping around bpd before the quake lost exports of bpd are costing it mln dlrs per month espinosa said reuter seoul announces more tariff cuts for u s south korea will cut import taxes on items including construction equipment photographic film cigarettes and pipe tobacco to help reduce its trade surplus with the united states the finance ministry said the tariff cuts of between five and percentage points take effect on july this brings to the number of goods on which import taxes have been cut this year a ministry official said the are among about items on which washington has asked seoul to lower tariffs he added today s announcement follows saturday s removal of import curbs on products for of those products the u s had had sought free access to the south korean market this is in line with the government s policy to limit our trade surplus with the united states to help reduce trade friction between the two countries the official said south korea s trade surplus with the u s rose to billion dlrs in from billion in officials said the surplus was expected to widen further in but seoul would try to hold it below eight billion dlrs the finance ministry said tariffs would be cut later this month on a further items including acrylic yarn and ethylene by an average percentage points in order to check inflation the officials said the tariff cuts would contribute to holding wholesale and consumer price rises at less than three pct this year reuter u s study says tariffs and quotas could backfire the use of tariffs and quotas to reduce the flow of foreign goods into the united states will do little to cut the nation s swelling trade deficit a government study said in fact the federal trade commission ftc report said such protectionist policies could make u s products less competitive in the world marketplace by raising the cost of imported products that are re exported in different forms such policies are much more likely to hurt rather than help the productive capabilities of the u s economy it said the page report written by ftc economists john hilke and philip nelson blamed the rising trade shortfall which climbed to a record billion dlrs last year on shifting currency exchange rates and growing u s consumer demand other factors commonly blamed for the deficit such as foreign trade practices deteriorating u s industrial competitiveness high labour costs and government restrictions on mergers added little to the problem it said although each industry s competitiveness affects the level of imports and exports in that industry in general we find that there have been no significant industry specific changes affecting competitiveness that would explain the increase in the overall trade deficit the study said to the extent any government action is needed to deal with the trade deficits policies should focus on economy wide phenomena such as exchange rates and relative economic growth the ftc study said supporting its conclusion that broad based economic shifts were the cause of the increase in the trade deficit the report said it found that nearly all u s industries lost some domestic market share to foreign competitors in the s it also said it found a fairly direct relationship between the increased trade deficit and the influence of shifting currency exchange rates u s economic growth and domestic demand for goods and services which has outpaced foreign consumer demand the study examined seven factors which have been commonly blamed for the trade deficit foreign government subsidies and trade barriers to protect foreign industries a lack of investment in u s industry declining research and development in u s industry high labour costs union work rules the oil prices rises of the s and u s antitrust regulations in each case the study found little or no evidence that the factor had any impact on the trade deficit reuter pemex official says opec output critical to price crude oil prices could remain around dlrs a barrel until the end of the year but opec s decision on output at its next meeting would be the critical factor an official of mexico s state oil company petroleos mexicanos pemex told a group of japanese businessmen adrian lajous pemex executive vice president of international trade said current opec output already appeared to be very near the mln barrel per day level it set itself for the third quarter production is surging ahead of what was originally planned while demand is growing more slowly than envisaged a few months ago he said he said opec had to look very carefully at what level of production in the third quarter would effectively sustain the dlrs price and that an increase to what had originally been envisaged might soften price levels the member cartel is scheduled to meet on june in vienna to review its december accord on prices and output i hope opec will follow a very conservative attitude in terms of volume decisions lajous said a repetition of what happened last year when opec boosted output and sent oil prices tumbling down below dlrs is always there as a possibility he said i hope never again to go through the trauma of i expect other oil exporters have learned their lessons and discipline will be maintained he said lajous said there was still excess supply and as long as this remains there will be a tendency to instability in oil markets but prices should remain around to dlrs during if output remains under control he said saudi king fahd s remarks last month that increased production was not so important as long as incomes would not be affected by the output were very relevant and welcome from such a powerful producer reuter seoul announces more tariff cuts for u s south korea will cut import taxes on goods including construction equipment cigarettes and tobacco to help reduce its trade surplus with the united states the finance ministry said today the tariff cuts of between five and pct will take effect on july south korea ran a trade surplus of billion dlrs with washington in sharply up from billion in today s announcement brings to the number of goods for which similar measures were taken this year a ministry official said the are among about items on which washington has asked seoul to lower tariffs this is in line with the government s policy to limit our trade surplus with the united states to help reduce trade friction between the two countries said the official reuter saudi renegotiation of aramco deal moving along saudi arabia s renegotiation of its collective agreement with aramco to purchase oil for the latter s ex partners is moving along and should lead to a fundamental structural change in the contract oil industry sources said petroleum intelligence weekly in this monday s edition said negotiations are moving along for adjustment of the mln bpd joint long term agreement at official prices and volumes and other terms may be rearranged the agreement signed in january for the months from february to june is up for renegotiation under the january contract aramco was to purchase mln bpd for the four partners allocated among them as exxon corp xon bpd texaco inc tx bpd mobil corp mob and chevron corp chv bpd between them but an overlifting by texaco inc in the first quarter allowed other companies like exxon corp to underlift its obligations under the contract piw said that that one alternative under consideration is to revert to four individual contracts rather than a collective agrement john lichtblau director of the petroleum industry research foundation inc said that renegotiation of the pact was more of a formality as the saudis have each company on a separate schedule although separate agreements with the companies would favor one on one negotiations and ensure that contracted liftings occur the companies will probably follow the saudi wants within limits as they do not want to antagonize them for the long haul he said lichtblau said that the renegotiations would most likely concentrate on volume rather than price saudi displeasure with the agreement has long been noted and in april industry publications said that renegotiation were being sought a fact later confirmed by reuters with aramco aramco corp was formerly owned by chevron corp chv exxon corp xon mobil corp mob and texaco inc tx but is now owned by saudi arabia which bought its assets although the ex partners have various agreements with saudi arabia reuter u k money market given mln stg late assistance the bank of england said it provided the money market with late assistance of around mln stg this takes the bank s total help today to some mln stg and compares with its latest forecast of a mln stg shortage reuter opec output in may seen over ceiling at mln bpd london june opec s may output appears to have risen well above its mln bpd ceiling to mln bpd and the increase is likely to put a short term lid on spot oil prices kleinwort grieveson securities says but kleinwort s latest world oil report said re stocking and lower non opec output earlier this year should allow the group to produce up to mln bpd in the current third quarter on the supply demand front the market continues to enjoy a degree of stability rarely seen in recent years it said it said most opec members were overproducing slightly but only the united arab emirates uae was seriously above quota the report said saudi arabia had been sending clear signals on the need to maintain oil prices at current levels of around dlrs a barrel and adopt provisional output rises agreed in december when opec meets in vienna on june if opec adopts the provisional ceilings of mln bpd in third quarter and mln bpd in the fourth there will probably be room for overproduction in the third quarter when demand for its crude will probably be to mln it said it said that the uae and ecuador may demand higher quotas in vienna but the biggest obstacle is iraq which has refused to honour its quota as it is less than that of gulf war enemy iran but opec appears committed to a short meeting and realises something must be done about the iraq issue the report said according to kleinwort s sources saudi arabia has already held separate talks with iran and iraq and is urging iraq to be more moderate one strong indication that some kind of deal may be eventually worked out is the almost complete silence coming from iran it said indications are that in return for going along with the saudi desire to maintain official prices in vienna iran is seeking concessions from the kingdom on the iraq issue it said kleinwort said the kingdom will face an increasingly uphill task in trying to maintain prices around dlrs beyond firstly opec hardliners led by iran are bound to oppose such a move secondly other opec members will press for another price rise if the dollar remains weak against other currencies thirdly saudi arabia may be forced to raise prices earlier than it intended to ward off growing calls for higher prices from the u s to stimulate domestic drilling and exploration the report concluded that there is a strong possibility official opec prices will rise to dlrs a barrel by end and dlrs a barrel by end reuter compromise seen likely over conoco statoil dispute norway is expected to seek a compromise solution to defuse a row between den norske stats oljeselskap a s stat ol statoil and conoco norge a s over which firm will operate the heidrun oil field government sources said the sources who asked not to be named said the government will likely recommend that conoco be allowed to continue as the field s operator through the development phase with statoil taking over only after production starts in the early s oil minister arne oeien told reuters the government had today discused the heidrun matter but that no final decision had been taken and several questions remained unresolved it was unlikely the government would announce its decision on heidrun operatorship until after thursday s cabinet meeting and after discussing a proposed solution with both companies the sources added this spring norway s state owned oil company statoil exercised an option in the heidrun field exploration license that if approved by the government would allow it to relieve conoco as heidrun operator a move sharply criticised by conoco heidrun is often cited by the government and industry as the most likely candidate for the first field development project on the haltenbanken exploration tract off central norway reuter reagan says u s allies must honor accords on exchange rate stability reagan urges fulfillment of exchange accords president reagan preparing to depart for the venice economic summit on wednesday said the united states and its allies must fulfill agreements on exchange rate stability economic policy decisions made last year in tokyo and at this year s meetings of group of finance ministers in paris and in washington cannot be ignored or forgotten he said the commitments made at these meetings need to be translated into action reagan said in a pre summit speech celebrating the th anniversary of the marshall plan reuter basin pipeline texas okla border washed out by floods some bpd crude affected major u s oil pipeline shut down by floods flooding in the red river on the texas oklahoma border has shut down the basin pipeline a inch pipeline that transports as much as barrels per day of sweet and sour crudes from texas to cushing okla a texaco pipeline co spokesman confirmed the water is rushing by so fast that we can t get any divers down to assess the damage but there is some possibility that the pipeline could be up by the end of the week a company source said the pipeline transmits roughly two thirds sour crude and one third sweet crude oil from the midland texas region texaco sources said that if the pipeline service is restored by friday there would be little problem in restoring oil which has been lost to the flood but if the pipeline is down more than days it will be difficult to make up without prorationing and we would not like to proration this pipeline if we don t have to the basin pipeline is jointly owned by atlantic richfield corp arc shell oil co a subsidiary of the royal dutch shell group rd and texaco inc tx which is the pipeline s operator peter beutel analyst at elders futures inc said crude oil futures contracts on new york mercantile exchange rose to new highs this afternoon following news of the pipeline break july crude futures of west texas intermediate traded up to dlrs a barrel a rise of more than cts cash market prices also firmed on the news with sellers of wti raising offers to dlrs a barrel sour crudes which would be most affected by the pipeline shutdown however were slow to react to the news with west texas sour and alaska north slope holding cts to one dlr a barrel below wti respectively dan stevens manager of public and government affairs at texaco said the company hopes to fix the pipeline in five days but that will depend on when the water level of the red river recedes there is already evidence that the water level is dropping and it appears the rain has stopped in the area affecting the pipeline stevens said he said the segment of the pipeline that was damaged was underground and at a distance from the red river that flooded the pipeline runs over the red river and under the subsoil nearby according to stevens he said some of this subsoil was apparently washed away the potential for environmental damage is being downplayed at this time despite the volume of oil that runs through this line texaco s stevens said that aerial surveillance has not found any crude on the water in the river or in lake texoma which is nearby reuter congressman says u s unprepared for oil cutoff rep mike synar said today that while president reagan is ready to use military force to protect kuwait tankers in the gulf the united states is ill prepared at home to deal with a new energy crisis synar democrat of oklahoma made his remarks in comments on a study by the general accounting office gao on the u s participation in the test of the emergency oil sharing program of the international energy agency the iea an alliance of oil consuming countries was formed after the arab oil embargo to find ways to deal with any future oil cutoff synar said the president is prepared to take military action to protect kuwaiti oil tankers but has been unwilling to take less dangerous equally important action to prepare our nation for the next energy crisis reagan said the u s military would protect kuwaiti oilers to assure the west of a continuing supply of middle east oil increasingly being threatened by the iranian iraqi war synar who asked for the gao report after criticism of u s action in a previous iea test said the united states successfully advocated a test limited to training participants in oil sharing procedures and the system s mechanical aspects reuter total petroleum tpn shuts texas pipelines total petroleum na tpn shut down several small crude oil pipelines operating near the texas oklahoma border last friday as a precaution against damage from local flooding according to gary zollinger manager of operations total shut a inch line that runs across the ouachita river from wynnewood to ardmore with a capacity of bpd as well as several smaller pipelines a few inches wide with capacities of several thousand bpd or less zollinger said the basin pipeline a major pipeline running bpd run by a consortium of other oil companies was closed today one other small pipeline that total also closed has a capacity of to bpd and crosses the red river in fargo texas zollinger said he said the closed pipelines run under river water and could be damaged as the flooded rivers erode the river banks and expose the piping zollinger said total is waiting for the river waters to recede before they reactivate the pipelines reuter doe reaches proposed oil settlements the energy department said it reached proposed oil pricing settlements totaling dlrs with the operator and four working interest owners of a d leblanc no well vermillion parish la trigon exploration co inc operated the well from june to january for d bryan ferguson c william rogers omni drilling partnership no and entex inc doe alleged trigon caused overcharges of dlrs by improperly classifying its oil as newly discovered crude a classification that allowed charging higher prices during a period of price controls it said the proposed settlements would resolve disputes over possible violations by the five parties doe added that in agreeing to the settlements the five did not admit any violations or non compliance with its regulations it said it would receive written comments on the settlements before making it final reuter south korea increases duty on crude imports south korea has increased its duty on crude oil imports to dlrs a barrel from dlrs effective today the energy ministry said the duty to raise funds for special energy projects was adjusted after average crude import prices rose to dlrs a barrel in april from dlrs in march and dlrs in april ministry officials said a separate pct import tax on crude oil is unchanged reuter venezuela tightens foreign exchange restrictions venezuela s central bank has ordered venezuelan banks and exchange houses to cease foreign exchange operations with brokers based outside the country according to a copy of a central bank telex made available to reuters the measure confirmed by a brokerage firm here has effectively cut off all foreign participation in venezuela s volatile currency market the telex issued on may was signed by carlos hernandez delfino manager of the bank s department of international operations the telex said the restriction on business with foreign brokers is in line with an earlier measure prohibiting foreign exchange houses from selling dollars or other foreign currencies to anyone living outside venezuela in recent weeks the venezuelan government has denied rumours that it intends to impose foreign exchange controls to prop up the weakening bolivar but brokers said the central bank s move is seen as a de facto currency control it is definitely a control in the sense that there s no longer complete freedom to operate one broker here said gradually they re imposing restrictions and the direction is towards complete control the broker said the broker who requested anonymity said virtually all his venezuelan customers had stopped doing business with him since the central bank issued the telex and followed it up with telephone calls he said that before the restriction was imposed the volume of his firm s transactions with venezuela was about mln dlrs a day it was a frenetic market it was really quite active he said the broker said he saw no logical explanation for the prohibition because his firm only acted act as an intermediary between venezuelan brokers exchange houses and banks we weren t buying dollars from venezuelans that s ridiculous he said they ve been on a rampage against foreigners the broker noted that two months ago venezuela s central bank quietly announced that banks doing foreign exchange business outside venezuela would have to respect a new pct reserve requirement in february the central bank also prohibited trading in bolivar futures the broker said we used to have a forward market he said for a small currency it was miraculous he said the bolivar which averaged to the u s dollar in would continue to slip from its current range of to because the central bank was rapidly running out of foreign reserves to support the currency on the free market reuter mees newsletter says oman offers oil discounts oman has granted term crude oil customers retroactive discounts from official prices of to cents per barrel on liftings made during february march and april the weekly newsletter middle east economic survey mees said mees said the price adjustments arrived at through negotiations between the omani oil ministry and companies concerned are designed to compensate for the difference between market related prices and the official price of dlrs per barrel adopted by non opec oman since february reuter poehl looks set for eight more years at bundesbank for currency dealers karl otto poehl is the scourge of speculators for bankers he is the man who has played a key role in shaping the world s financial destiny for the last seven years and for germans he is the guardian of the mark president of the powerful and independent west german central bank the bundesbank poehl is likely to have his contract renewed for another eight years when it expires at the end of this year government officials say index of economic spotlights see page ecra but no official announcement has yet been made raising eyebrows in west germany s business community the ebullient poehl spent seven years in bonn in top ministerial posts under the social democrats now in opposition before he moved to the bundesbank there has been speculation that chancellor helmut kohl would try to replace poehl with a man closer to his own christian democrats but officials noted that poehl has worked closely and successfully with finance minister gerhard stoltenberg since kohl s government took office in poehl the most senior central banker apart from paul volcker of the united states enjoys a strong international reputation which it would take a newcomer years to build up given these circumstances kohl will probably overlook poehl s past as an adviser to former social democrat chancellor willy brandt and top aide to helmut schmidt when he was finance minister bankers said it was schmidt who as chancellor appointed poehl to his present job in in recent months with the mark s strong rise against the dollar poehl has made exchange rates the central concern of the bundesbank s council a highly conservative institution which has doggedly pursued monetary policies to prevent inflation catching hold older germans can remember two bouts of galloping inflation this century but with consumer prices falling for much of and inflation negligible so far this year poehl thinks it is safe to relax the monetary reins a little and concentrate on the dangers to the german economy of a bloated exchange rate i am of the opinion that efforts to stabilise the dollar mark rate have reached a high priority also for the bundesbank because a further massive revaluation of the mark would endanger the economy in west germany he told business journalists in frankfurt recently ute geipel head of research at citibank ag says that poehl s reappointment would guarantee flexible monetary policy poehl s policy has always been a policy which does not focus so rigidly on domestic factors but also on the external economy she said an economist at a german bank who declined to be identified said if poehl is confirmed in his post it will certainly be a plus for the pragmatic course which is not so rigidly oriented towards money supply one of poehl s great struggles recently has been to persuade the united states to stop talking down the dollar for poehl the significance of the february louvre accord was that the united states agreed to join efforts to stabilise currencies the louvre accord was greeted with scepticism by currency dealers who said they would soon put it to the test but in fact the dollar has been relatively stable since the pact this is because the markets know or perhaps because they don t know what the central banks can do poehl says of intervention in currency markets which can quickly turn rates round making a speculator s position worthless poehl was born in and worked as a financial journalist in the s before starting his ministerial career a relaxed sun tanned figure who enjoys cracking jokes over a glass of beer he is hardly a stereotype central banker he is also a keen sportsman who likes to watch football and play golf poehl says currency market intervention cannot substitute for correct economic policies if exchange rates are imbalanced but you can achieve an enormous effect with a small amount if you strike at the right moment he said bundesbank dealers are very professional and skilled they ve burnt the fingers of many people he said and unlike the speculators poehl notes the bundesbank dealers usually make a profit reuter saudi arabia will not agree mad oil price rise saudi arabia s oil minister hisham nazer said riyadh would not agree to a cut in oil prices and would not accept a mad increase that would drive consumers away he told al riyadh newspaper saudi arabia follows a balanced petroleum policy it does not approve of a decrease in prices from current levels and it also does not accept a mad increase that would drive consumers away and make them try and find alternative sources for energy opec agreed last december to cut production after world prices hit new lows in they agreed on a pricing system aimed to stabilise the market around dlrs a barrel opec is scheduled to meet in vienna on june where it will review its current oil price and production policy saudi arabia s king fahd said last month that he wanted oil prices to remain stable for the next two years saudi arabia is the architect of the current pricing and production pact which is backed by kuwait and the uae the current pact set a production ceiling for first half of mln bpd and implemented fixed prices based on an dlrs a barrel average reuter taiwan curbs inflows of foreign exchange taiwan s central bank announced that as from today the overseas foreign exchange borrowings of local and foreign banks would be frozen at the level they reached at the end of may the central bank s statement added that the measure would be effective until the end of july bankers said the measure is designed to curb the inflow of foreign exchange and slow the growth of money supply they added that the move which sparked a record single day plunge of the local stock market would limit their ability to lend foreign exchange to importers and exporters foreign exchange borrowings by local and foreign banks reached almost billion u s dlrs by the end of april according to official statistics last week the central bank said that from today it would reduce its purchase of forward u s dollars from banks to pct from pct of the value of the contract it said the move was needed because of distortions in the foreign exchange market exporters nervous about the appreciating taiwan dollar have been heavily selling forward u s dollars on the interbank market to avoid exchange rate losses official figures show that forward u s dollar sales in may reached a record of almost six billion u s dlrs against billion in april all taiwan s foreign exchange earnings must be converted into local dollars boosting money supply at a time of booming exports money supply rose a seasonally adjusted pct in the year to end april raising fears of higher inflation in march the central bank clamped tight restrictions on remittances of foreign exchange by companies and individuals to taiwan in a move to curb inflows of speculative money economists and bankers estimate that the rising value of the local dollar has attracted about ten billion u s dlrs of speculative money into taiwan since early last year it has flowed in mainly from hong kong japan and the u s since september the taiwan dollar has risen by about pct against the u s dollar bankers said the government s efforts to stabilise the foreign exchange market were a prelude to lifting all curbs on capital outflows the central bank has said the controls will be dropped by the end of july or early august foreign exchange dealers said today s announcement caused jitters in the market with foreign and local banks making heavy purchases of u s dollars they said the central bank sold about mln u s dlrs taiwan s stock market plunged a record points to close at reuter japan concerned at ec trade threats minister japan is disappointed at the recent threats of trade retaliation from the european community ec just as the trade situation between the two is improving japanese trade and industry minister hajime tamura said i am deeply concerned that the ec has moved to take a harsher line toward japan despite this tangible improvement he said in a speech prepared for delivery at the opening of a new centre designed to improve understanding between the two sides last week foreign ministers of the ec nations agreed to impose tariffs on a range of unspecified japanese electrical goods unless tokyo opened its markets more to ec exports tamura referred to a pct rise in japanese imports of ec manufactured goods in the year ended march i feel this is a strong step on the road to balance through expansion while i do not deny the existence of the trade deficit between japan and the ec i believe it should be rectified not by reducing trade through import restrictions or export restraints but by expanding the overall trade tamura said reuter kuwaiti dinar rates firm aid window open interest rates on kuwaiti dinar deposits held firm in scattered trading despite a central bank decision to revive limited funding lines dealers said the central bank which last tuesday shut a daily aid window through which it lent funds of up to one year reopened the facility for three month money which was available at seven pct they said it offered one month funds at seven pct through swap facilities dealers said today s central bank action combined with sales of dollars by some banks helped ease a recent credit squeeze engineered by the monetary authority to stem a rush for the u s currency arising from attractive u s interest rates and gulf tension dealers said however as one dealer noted the market is still unsettled overnight funds bid at pct at the outset of business traded up to pct before easing as liquidity dragged offers down to pct by the close tomorrow next for which buy sell quotes started at pct ended at eight spot next was indicated at seven after opening bids of dealers quoted one week at eight seven against an early one month rates were at the same level after trade at eight then dealers quoted three months at seven pct and six month to one year funds at seven six pct they reported offshore offers of overnight at tomorrow next at eight and one year at pct towards the close the central bank fixed its dinar exchange rate steady at to the dollar against yesterday s the spot dinar was reuter saudi arabia opposes drastic change in oil price saudi arabia s oil minister hisham nazer said riyadh would not agree to a cut in oil prices and would not accept a mad increase that would drive consumers away he told al riyadh newspaper saudi arabia follows a balanced petroleum policy it does not approve of a decrease in prices from current levels and it also does not accept a mad increase that would drive consumers away and make them try and find alternative sources for energy opec agreed last december to cut production after world prices hit new lows in they agreed on a pricing system aimed to stabilize the market around dlrs a barrel opec is scheduled to meet in vienna on june where it will review its current oil price and production policy saudi arabia s king fahd said last month that he wanted oil prices to remain stable for the next two years saudi arabia is the architect of the current pricing and production pact which is backed by kuwait and the uae the current pact set a production ceiling for first half of mln bpd and implemented fixed prices based on an dlrs a barrel average reuter lawson says louvre currency accord satisfactory the louvre agreement by the group of seven finance ministers and central bankers to stabilise currencies has worked well and needs no fundamental strengthening at the economic summit in venice on june u k chancellor of the exchequer nigel lawson said previewing the summit which he expected would not produce any major new economic initiatives lawson told reporters work remained to be done on improving the conditions for lasting world economic growth side measures to boost growth he said i think it is possible that there may be scope for a further reduction in interest rates in germany he added but stressed that he had had no indication that such a move was likely he made no mention of japanese interest rates lawson said the u s should embark on a gradual reduction of its fiscal deficits over the next two or three years he said the february louvre accord had produced satisfactory exchange rate stability in part thanks to heavy coordinated intervention of group of seven central banks and he was content with sterling s exchange rate pointing to the record billion stg rise in u k may currency reserves announced today he said we have been playing a very full part ourselves we have been intervening to a very much greater extent than we had done hitherto lawson said there was a risk that the louvre agreement may falter if member states did not implement the macro economic commitments underlying the accord certainly it would be more difficult to maintain exchange rate stability if countries are seen not to implement their commitments in paris in this respect he said the u s budget deficit was very important noting the billion yen economic package announced by japanese prime minister yasuhiro nakasone last week lawson said what is really needed in japan is an increase in merchandise imports supply side measures are critical there is a specific range of consumer and agricultural goods where they have an extremely restrictive regime which is wholly unjustified he said lawson doubted that tokyo s partners would indulge in japan bashing at the summit especially after the economic stimulation package and the announcement of nakasone s plans to increase japanese development aid over the next three years japan s more flexible stance on tokyo stock exchange membership would also help deflect criticism he said he said he thought west germany would instead come under pressure at the summit to adopt similar stimulation measures to jack up faltering economic growth in this respect lawson said he hoped bonn would bring forward to january part of its agreed package of tax cuts scheduled for he also called on bonn to push ahead with the privatisation of german national industries on debt lawson said he expected a three point british plan to alleviate the burden of the poorest sub saharan countries to make progress in venice the plan involving concessional rescheduling of sovereign debt in the paris club was first proposed at the imf and world bank meetings in washington earlier this year lawson said he would seek to consolidate political backing for the plan at the venice summit and hoped the programme would be finalised at the autumn meetings of the imf and world bank he welcomed the recent moves by citicorp and chase manhattan to increase sharply their third world debt provisions first it is a blow for realism second because the market response has shown that banks have much less to fear from this sort of move than they felt before citicorp he said u k banks should follow bank of england recommendations strengthening their balance sheets and making more provisions they have done it to some extent they need to do it more lawson said adding it was up to the banks themselves to determine the appropriate size of provisions he also said the dismantling of farm subsidies would be discussed at the summit there is a consensus which we have to push further reuter lawson calls intervention proof of stability goal the scale of foreign exchange intervention the bank of england has carried out recently is clear proof of britain s determination to stabilise exchange rates as agreed between the group of seven industrialised countries in paris in february chancellor of the exchequer nigel lawson said saying he was content with sterling s current value lawson told reporters he wanted to maintain the exchange rate stability we have all signed up for he declined to say if he favoured a rise or a fall from present sterling levels may currency reserves out today showed a record billion stg rise pointing to massive currency intervention in april reserves rose a hefty billion stg pointing to the reserves data lawson said we have been playing a very full part ourselves in meeting our commitments toward exchange rate stability as agreed in paris we wish to see it stability continuing he added asked which techniques were available to preserve stability lawson said both central bank intervention and interest rate changes could be used to tackle the market pressures there are from time to time interest rate stability is not an objective in that sense rates have to be moved up and down at times he added lawson said he expected intervention to be sterilised by draining excess sterling liquidity from the market through new issues of government securities and foreign currency sales when the market allowed this would limit the inflationary impact of intervention he said sterilisation will be dictated by market tactics not necessarily in the month in which intervention occurs lawson said i am confident that we can sterilise on this scale reuter turkish trade deficit widens in april turkey s trade deficit widened to mln dlrs in april from mln in march and mln in april the state statistics institute said the deficit for the first quarter of widened to billion dlrs from billion a year earlier april exports totalled mln dlrs compared with imports of billion exports in the first four months were worth billion dlrs compared with imports of billion reuter u s energy secretary sees higher oil prices energy secretary donald hodel said he expects oil prices to rise significantly by the year probably to around dlrs a barrel in current dollars i do anticipate a significant increase by thirty three dlrs a barrel is not unreasonable hodel told the senate energy committee hodel said the loss of some domestic oil production through the shutdown of stripper barrels a day or less wells because of low prices was probably permanent he said he was also concerned by the decline in domestic oil exploration hodel urged congress to approve oil exploration in section of the arctic national wildlife refuge in alaska he said geologic condtions in the area were favorable for the discovery of oil fields equal to those in nearby prudhoe bay reuter lukman sees stable oil price for next couple years the current crude oil price of between and dlrs a barrel will remain stable over the next couple of years rising only one to two dlrs a barrel per annum to keep up with inflation opec president rilwanu lukman said lukman who was speaking during talks with swedish trade officials said the stable price depended upon output restraint by both opec and non opec oil producers swedish government officials said they said lukman who is also nigerian oil minister made the remarks whilst talking about the connection between third world debt and industrialised nations crude oil output controls did not necessarily mean higher energy bills for the world s industrial nations lukman said although very low oil prices such as those seen around the beginning of the year may appear beneficial for the industrial countries that depend on imported energy they would only lead to wastage and overdependence on the fuel in the long term he said this in turn would bring a swing back to extremely high prices he added sweden heavily dependent on imported oil suffered a major crisis in the mid s when oil prices spiralled reuter u s weighs lifting japanese trade curbs the white house has completed a new review of japanese semiconductor trading practices but has not yet decided whether trade sanctions levied against japan last april should be lifted u s officials said they said the president s economic policy council looked at japan s adherence to the u s japanese semiconductor pact yesterday and that an announcement may be made shortly but there was no hint what the announcement might be officials have said the pct tariffs on mln dlrs of japanese exports could be modified if japan was found to be honoring a portion of its semiconductor pact but they also noted that the white house has said it was unlikely the tariffs would be lifted before the meeting of the world s seven major economic powers in venice on june the officials added that while the curbs complicated u s japanese economic cooperation they did serve to blunt congressional criticism that the reagan administrtation was not taking tough actions to reduce he u s trade deficit reagan imposed the sanctions on april in retaliation for japan s failure to honor commitments to end dumping semiconductors in world markets at less than production costs and to open its own market to u s goods the sanctions were levied on certain japanese television sets personal computers and hand held power tools reagan in imposing the curbs said they would be lifted as soon as there was evidence of a pattern that japan was adhering to the pact reuter energy secretary sees higher oil prices energy secretary donald hodel said he expects oil prices to rise significantly by the year probably to around dlrs a barrel in current dollars i do anticipate a significant increase by thirty three dlrs a barrel is not unreasonable hodel told the senate energy committee hodel said the loss of some domestic oil production through the shutdown of stripper barrels a day or less wells because of low prices was probably permanent he said he was also concerned by the decline in domestic oil exploration hodel urged congress to approve oil exploration in section of the arctic national wildlife refuge in alaska he said geologic condtions in the area were favorable for the discovery of oil fields equal to those in nearby prudhoe bay the area could contain potentially recoverable oil resources of more than billion barrels an amount nearly equal to the prudhoe bay oil field which currently provides almost one fifth of u s domestic production hodel said he said production from the new section could begin about the time prudhoe bay production begins to decline in without endangering caribou or other wildlife in the area reuter shultz welcomes tokyo economic package u s secretary of state george shultz said the billion yen economic package announced by tokyo last week went further than the u s had expected but he said the u s would not lift the selective economic sanctions it imposed on japanese imports in april until tokyo changed its sales policies concerning computer microchips speaking in a televised news conference linking several european capitals shultz said it was heartening that the japanese had confronted the problem of stimulating domestic and global demand there is an even greater amount of stimulus than was originally thought said shultz speaking from washington it is a lot more than nothing it is more than was talked about when prime minister yasuhiro nakasone was here it involves a major reduction in tax rates and we believe that getting the tax burden down is one way of stimulating the economy he added but asked by japanese reporters also linked into the news conference whether the positive reaction meant the u s might decide at next week s venice summit to lift its sanctions on some japanese electronic goods shultz replied these sanctions were undertaken on the basis of an agreement that had been reached between the united states and japan on various sale practices and prices relating to the chip market they will be lifted as the facts of change by japan to the agreement that it made become evident he said u s officials had only been able to monitor the situation for a month and that it was impossible to determine a trend on only one month s data the u s imposed pct import duties on personal computers colour televisions and power tools alleging that japan had violated last september s bilateral agreement by selling computer chips at below fair market value shultz said west germany and other nations would also do well to look at what they could do to stimulate demand asked whether the u s could reasonably ask its allies to take action to stimulate the world economy without a bold american initiative to reduce the size of the federal budget deficit shultz said moves were already underway to tackle the problem he said by the end of the current fiscal year the deficit would probably be reduced by around billion dlrs against last year and that the budget being worked on this year would contain a major reduction reuter major u s pipeline may be closed several days the operator of a major u s crude oil pipeline shutdown because of flood damage said it may be several days before repairs are made and the system is functioning again dan stevens manager of public and government affairs at texaco inc tx operator of the pipeline through its subsidiary texaco pipeline co said the company hopes repairs will begin in about five days and expects it to take several more days to complete at this point we are lining up what we know we need to get the job done stevens said adding that the timing for repairs will depend on the damage to the pipeline which is difficult to assess because of flooding on the red river the pipeline was shipping roughly barrels of crude oil per day or about pct of its capacity during the days preceding its shutdown on saturday stevens said the pipeline was shut down from cushing okla to witchita falls kan on saturday due to an undetermined leak at the red river crossing near the oklahoma texas border because of severe rains a spokesman for texaco said stevens said it was reasonable to suggest the pipeline could operate at full capacity when it reopens in order to make up for the shortfull but cautioned they will talk with customers to determine their requirements oil analysts and traders said they were not sure if the shutdown will continue to raise u s oil prices monday after texaco confirmed that the pipeline had been closed west texas intermediate crude in the spot market and on new york mercantile exchange s energy futures complex rose cts a barrel stevens said it was reasonable to suggest the pipeline could operate at full capacity when it reopens in order to make up for the shortfull but cautioned they will talk with customers to determine their requirements oil analysts and traders said they were not sure if the shutdown will continue to raise u s oil prices monday after texaco confirmed that the pipeline had been closed west texas intermediate crude in the spot market and on new york mercantile exchange s energy futures complex rose cts a barrel reuter asamera asm completes refinery sale asamera inc said wholly owned asamera oil u s inc concluded the mln u s dlr sale of its denver refinery to total petroleum north america ltd in addition total is purchasing crude oil and refined product inventories at market value asamera said reuter reagan seeks romania trade concession president reagan called for continued nondiscriminatory treatment for romanian exports to the united states in the face of congressional opposition because of the bucharest government s record on human rights a white house statement said reagan s decision to press for continuation of so called most favored nation mfn status for romania had been exceptionally difficult and came after all options were seriously considered but the statement said that despite concerns about human rights abuses by the bucharest government the president had decided that should be continued because it helped stimulate emigration from romania and gave the united states influence on human rights practices there the statement was issued as reagan sent to congress requests for one year extensions of mfn for romania hungary and china the house of representatives has attached to a trade bill legislation that would temporarily deny mfn for romania pending certification by reagan that the country had made progress on human rights there is no controversy over continuation of mfn for hungary and china reuter investment crucial to u s textile recovery with more private investment not more protection the u s textile industry could become competitive with the most modern foreign producers analysts from two congressional agencies said today the office of technology assessment a nonpartisan arm of congress told a house ways and means trade subcommittee hearing there was still concern for the future of parts of the u s textile and apparel industry but there was more reason for optimism than a few years ago while textile producers are making significant investments they could do more ota analyst henry kelly said the congressional budget office cbo the nonpartisan budget analysis arm of congress said federal loans or loan guarantees would be preferable options for congress rather than increased trade protection which could lead to foreign retaliation cbo analyst edward gramlich said past trade protections first imposed in the s have had only a small benefit for profits and investments of domestic firms trade subcommittee chairman rep sam gibbons said the agencies analyses seemed to agree with his opinion against congressional approval of protectionist textile quota legislation aimed mainly at western europe japan and other asian textile producing countries president reagan last year vetoed a textile protection bill but it was reintroduced in this session of congress and is expected to be voted on in the house this year however approval this year is in doubt because passage of a major trade bill without specific protections for textiles showed a weakening of support for the legislation most u s producers have fallen behind other foreign producers in the use of modern textile and apparel production equipment and net imports are growing faster than the domestic markets kelly said he added that private investment in the textile and clothing industry in of pct was less than one seventh the average manufacturing investment of pct despite existing import quotas and tariffs imports of textiles grew pct in and imports of apparel grew pct while u s production rose only pct the traditional industry seems destined to be replaced by new technology imports or some combination of both while the industry may not be able to compete in all domestic markets that it enjoyed twenty years ago the results of our research indicate that portions of the domestic market can be recovered and that exports can be expanded kelly said reuter colombian group suspends bombings of pipelines a colombian group announced the suspension of its bombings of oil pipelines pending the government s levy of a social tax on foreign petroleum companies and an mln dlrs fine on the occidental petroleum corp oxy there was no indication the government would meet the conditions demanded by the leftist national liberation army eln according to the state oil firm ecopetrol the eln carried out attacks on petroleum pipelines between and the assaults the most recent launched two months ago have caused an estimated total of mln dlrs in damage in a communique the eln said it would demand a tax of one dollar per barrel of crude oil pumped by foreign firms as a condition for maintaining its suspension of the assaults foreign oil firms pump an average of barrels per day in colombia colombian tax authorities are investigating occidental a u s owned firm for alleged tax evasion if the charges are proven the firm could face a fine of up to mln dlrs the eln demands the government charge the penalty reuter near term strength seen for currency futures currency futures are likely to move higher following the sharp rally today after president reagan announced that paul volcker would not accept a third term as federal reserve chairman and that alan greenspan was nominated as his replacement currency analysts said contrary to predictions before the volcker resignation analysts are calling for higher currency futures prices between now and the june venice economic summit in particular uncertainty about greenspan s attitude to the dollar could undermine sentiment toward the u s currency analysts said greenspan said today that the dollar appeared to be nearing a bottom but the market will bear in mind his remarks in chicago last week that the dollar s recent move upward was a technical reaction and that it would trade significantly lower analysts said disappointment of european central bankers over the appointment will be used as an opportunity to sell the dollar lower said manufacturers hanover futures vice president carol mackoff the international community will not like this appointment as it suggests the possibility that the u s budget deficit is too much of a burden on monetary policy and that volcker was unable to get the commitment he sought to reduce the deficit added merrill lynch economics analyst david horner furthermore that greenspan was not named two months ago suggests that he was not the administration s first choice and that the status of his appointment was as a bridesmaid horner said a declining dollar scenario with higher currency futures prior to and throughout the venice meetings would be mitigated only by concrete action as opposed to jawboning at the g summit he said but g finance ministers judged by recent statements may be at an impasse analysts said japan and west germany today reiterated that neither planned further interest rate cuts despite pressure from the u s to do so mackoff said the u s on the other hand has not cut its budget deficit as japan and west germany have urged she said should g members force a u s commitment to cut its budget deficit in the next two years a further decline in the dollar could be forestalled horner said however the impact from venice will be nothing if nothing changes horner said smith barney harris upham and co analyst craig sloane said european currencies will likely move to the higher end of their ranges after today s sharp advance for the next two weeks sloan calls for september yen futures to advance toward the area he said september marks could close in on as an upside target while swiss francs could climb to a range between and reuter shultz predicts rapid narrowing of u s trade gap secretary of state george shultz said the u s would erase its large foreign trade deficit faster than many predicted and the consequences for its trade partners might be traumatic the u s economy will inevitably make the adjustment necessary to move from a deficit to a surplus trade balance in order to service our growing foreign debt he told a conference attended by the six members of the association of southeast asian nations and their leading western friends in my view this will happen more rapidly than many observers now predict the universal strategy of aggressive export led growth is becoming less effective shultz said it is not arithmetically possible for every country in the world to be a net exporter at the same time the u s deficit which we all decry has been in a sense the place into which everyone s export led strategy for growth has gone the huge surpluses of japan and west germany have fed on this deficit so something will have to give and it will be possibly a traumatic experience he added while you must keep up the pressure on us to eschew protectionist policies you must act too shultz said i can do a better job of convincing the congress to leave our door open to imports if more of our trading partners open their doors wider he told the group which included representatives from australia canada japan new zealand and the european community reuter australian crude output falls in first nine months australian crude oil and condensate output fell pct to megalitres or about mln barrels in the first nine months of fiscal ending june the department of resources and energy said the decline in production in the nine months to end march reflected mainly a sharp dip early in the fiscal year when low oil prices and high marginal excise rates led to a reduction of output from bass strait department figures in its major energy statistics publication show a megalitre is barrels reuter toshiba sharp restrain lap top pc exports to ec toshiba corp tsba t and sharp corp shrp t decided to maintain exports of lap top personal computers to the european community ec at last year s levels despite the halt of shipments to the u s company spokesmen told reuters they said the voluntary restraints were aimed at averting ec sanctions urged by european computer makers the europeans feared japanese personal computers would flood ec markets after washington imposed pct tariffs last april toshiba and sharp together control about pct of the personal computer market in the ec the sharp spokesman said toshiba said exports of t and t lap top computers would continue at units a month for the time being sharp said exports to the ec of pc series lap top personal computers would continue at last year s level of to units a year washington imposed the tariffs because of japan s alleged failure to uphold a agreement on semiconductor trade reuter indonesia cuts july crude supplies to japan indonesia s state oil company pertamina has informed its affiliated japanese companies that crude oil supplies will be pct less than contractual volumes in july a spokesman for an affiliated company said he said the allocations were in line with indonesia s production ceiling under its current opec quota so they might be increased if opec ratifies a production rise next week allocations of indonesia s main traded crude minas had been cut by pct and duri by pct he said last month contractual volumes were cut by pct contractual volumes assume no production ceiling oil traders said indonesian grades were already trading above their official selling prices osp on the spot market due to strong demand from japan and the u s and tight supplies a cargo of duri loading in july was reportedly traded yesterday at cents over its osp of dlrs per barrel and minas is trading about cents higher they said reuter u s senators propose ban on toshiba imports three u s senators said they will propose a temporary ban on imports of all toshiba products due to the company s illegal sales of sensitive high technology goods to the soviet union senator jake garn john heinz and richard selby said at a hearing of the senate banking committee on export control they will offer the proposal as part of a major trade bill when it is brought before the senate this summer garn a utah republican said i am talking about specific retribution on a company that endangers the security of their own country and ours reuter opec differentials not seen posing major problems some opec states are unhappy about the prices assigned to their crude oil but this should not pose great problems when the group reviews its six month old price and output pact in vienna next week oil analysts say they said nigeria which holds the opec conference presidency and qatar probably have the biggest grievances about price differentials making some of their crudes uncompetitive there has also been speculation by japanese traders that opec might want to mark up prices of high sulphur heavy crudes to correspond with greater demand and higher fuel oil prices but most experts agree that a major overhaul of price differentials is unlikely so as to avoid giving the market signals of a dent in opec s new unity all opec members can make a good case for changing differentials said one analyst with a major oil company but at the end of the day the attitude is going to be leave well alone and little or nothing is likely to be altered iran libya and saudi arabia are among those who also saw sales problems earlier this year traders say but diminished customer resistance to fixed prices and in some cases marketing incentives have helped their sales some producers can sell uncompetitively priced crudes by means of discounts processing deals or selling them alongside better priced grades in a package many opec crudes are seen to be reasonably priced at least for some part of the year but many experts say opec should change prices quarterly or monthly to match seasonal demand for fuel oil rich heavy crudes and gasoline rich lighter grades at its last meeting in december opec agreed to reintroduce fixed prices from february around an dlr per barrel reference point official prices had been effectively dropped in when members offered discounts to attract customers opec also decided to limit first half output to mln bpd and proposed ceilings of mln for the third quarter and mln for the fourth analysts expect it will now extend or raise slightly the current ceiling for the coming months spot market and netback values for some crudes do not mirror official prices but opec will probably keep the dlr target and at most make minimal changes to differentials analysts say the dlr figure is based on a basket of six opec and one non opec crudes opec assigned prices to its other key export crudes with a dlr gap between the heaviest and lightest extra heavy crudes were among those left out industry estimates vary on the proportion of opec oil exports actually sold at official prices several experts say only one quarter to one third of the total in fact sells at official prices with some of the rest included in processing or barter deals or sold in the form of refined products problems with the new structure appeared earlier this year when some producers output fell due to customer reluctance to pay the new prices nigeria especially found its gasoline rich bonny light crude now opec s highest priced grade at dlrs a barrel was uncompetitive on the spot market against britain s brent in february and march nigeria s production shrank below its mln bpd opec quota spot prices have since revived due partly to seasonal demand for gasoline and its output has risen some experts feel bonny light is still overvalued and say its price should be cut by between cts to one dlr a barrel but mehdi varzi chief oil analyst with london s kleinwort grieveson securities doubts nigeria will actively push the differentials question in vienna it would not look good for opec unity if nigeria which holds the presidency raised the issue he said reuter shell canada raises crude oil posting canadian cts bbl fed s seger says foreign exchange markets showing signs of stability fed governor seger sees currency stability federal reserve board governor martha seger said there were signs of helpful stability in foreign exchange markets in recent weeks i think we are beginning to see more calm in those markets seger told reporters after a speech to the u s league of savings institutions i think it is very healthy when you can get into a period of stability she said she said market forces have a major influence on exchange rates and said she did not know the right value for the dollar against the yen or the mark seger told the savings and loan executives that she was concerned about financial markets absorption with exchange rate influences i am concerned that we have gotten so nervous about exchange rates seger said she said the fed takes into account additional factors in determining monetary policy than the value of the dollar against other currencies on the economy seger called the latest figures in gross national product a modest upward revision reuter imperial oil raises crude oil postings canadian cts bbl light sweet now phillips raises crude oil posted prices cts bbl effective yesterday wti now dlrs shell canada shc raises crude cts canadian shell canada shc whose majority interest is owned by the royal dutch shell group of companies raised the postings of light sweet and sour crude oil from edmonton swann hills canadian cts a barrel effective today the new price for light sweet crude oil is canadian dlrs a barrel while the new price for light sweet sour crude is canadian dlrs a barrel the royal dtuch shell group owns pct of shell canada and public shareholders primarily canadian own the remaining pct of the company a shell canada spokesman said reuter union pacific raises crude oil postings cts a bbl effective yesterday wti to dlrs imperial oil imo a raises crude canadian cts canadian imperial oil pct exxon owned said it raised its posting for light sweet crude oil at edmonton by canadian cts a barrel effective today the company said its new posting for light sweet crude oil at edmonton is canadian dlrs a barrel reuter diamond shamrock raises crude oil posted prices cts a bbl effective yesterday wti to dlrs coastal raises crude oil postings cts bbl yesterday wti to dlrs southland corp raised crude oil postings cts bbl wti now dlrs bbl murphy raises crude oil postings cts a bbl yesterday wti to dlrs permian raises crude oil postings cts a bbl wti to dlrs southland slc unit raises crude cts bbl southland corp s subsidiary citgo petroleum said it raised its posted prices for crude oil across the board by cts a barrel effective june citgo said its new posting for west texas intermediate and west texas sour is dlrs a barrel light louisiana sweet is now posted at the company said reuter murphy oil mur raises crude postings murphy oil said it increased its crude oil posted prices by cts a barrel effective june the company said its new posting for west texas intermediate and west texas sour is dlrs a barrel light louisiana sweet crude is now dollars a barrel the company said increases follow a general trend in the industry started yesterday by sun co reuter phillips petroleum p raises crude postings phillips petroleum co said it raised its crude oil posted prices for west texas intermediate and west texas sour by cts a barrel effective june the company said the new posted price for wti and wts is dlrs a barrel the increase is in reaction to sun co raising postings similarly yesterday reuter petro canada raises crude postings cts canadian bbl sweet crude at dlrs canadian bbl union pacific unp raises crude oil prices union pacific resources formerly champlin petroleum said it raised posted prices for crude oil by cts a barrel effective yesterday the price increase brings west texas intermediate the u s benchmark grade to dlrs a barrel the posted price increase follows a similar move by several other oil companies sun co was the first to raise crude oil postings yesterday afternoon and today many other companies are following the last price increase made by oil companies was around may reuter marathon raises crude oil postings cts bbl wti now dlrs coastal cgp crude posting up cts bbl coastal corp cgp said it raised the postings of crude oil cts a barrel across the board effective yesterday june the new price for west texas intermediate is dlrs a barrel for west texas sour the new price is dlrs a barrel reuter national intergroup nii unit raises crude prices permian corp a subsidiary of national intergroup said it raised its crude oil postings by cts a barrel effective june the company said its new posted price for west texas intermediate and west texas sour is dlrs a barrel while light louisiana sweet is now the price hike follows other increases industrywide reuter petro canada crude up cts canadian bbl petro canada a state owned oil company raised the posting prices of sweet and sour crude oils cts canadian per barrel effective today the company said the change brings the price of light sweet crude to dlrs canadian per barrel and the price of light sour crude to dlrs canadian a barrel the crude oils are from edmonton swann hills reuter u k court rules against rtz on oil field costs the u k high court dismissed an appeal by rio tinto zinc corp plc s rtzl l rtz oil and gas ltd unit and ruled that the financial provisions a company makes for the future cost of abandoning an oil field are not tax deductible the press association reported the company was appealing against a decision of the tax commissioners that any such provision was a capital expenditure not a revenue expenditure and was not deductible the court was told that since the company had made an annual provision of around stg for the eventual cost of abandoning a rig an rtz spokesman said the ruling was not worrying as the subsidiary had assumed that the provisions were not deductible from corporation tax payable it would have been a bonus if the company had won but all budgeting had been on the assumption that it would not he said oil analysts said that rtz s assumption of liability was shared by the industry as a whole the ruling appeared to mean that tax relief on the expensive process of abandoning rigs would apply when the expense occurred not when provisions for future expenses were built into the accounts one analyst added reuter unocal raised crude oil postings cts bbl wti now dlrs bbl unocal ucl raised crude oil postings by cts bbl unocal said it raised its postings for crude oil by cts a barrel effective june the company said it is now posting west texas intermediate and west texas sour at dlrs a barrel unocal said its new light louisiana sweet posted price is dlrs a barrel the price move follows a wave of increases initiated by sun co yesterday reuter diamond shamrock drm raises crude postings diamond shamrock r and m said it raised its crude oil contract prices by cts a barrel effective june the company said its new posting for west texas intermediate crude is dlrs a barrel the price increase follows similar moves by several other companies reuter dupont unit raises crude oil postings cts bbl effective yesterday european community criticises u s trade measures the european community ec accused the united states of violating a political commitment to free trade through practices including a tax on imported gasoline and a customs user fee ec ambassador tran van thinh made the formal charge to the surveillance body of the general agreement on tariffs and trade gatt gatt spokesman david woods told reporters woods also said the ec was joined by the united states in criticising brazil for extending its list of products for which import licenses have been temporarily suspended so as to improve its balance of payments the united states charged japan with violating gatt rules by restricting imports of agricultural products through an import licensing system the united states asked for consultations with tokyo on the issue tran charged that the trade measures contravened a political commitment to halt and reverse trade barriers pledged by ministers in punta del este last september when ministers established the four year uruguay round to negotiate freer trade in areas they set up the gatt surveillance body to monitor this commitment known in gatt jargon as standstill and rollback tran criticised washington for the superfund tax on oil imports a customs user fee and the removal of a special machine tool known as category fsc from its government procurement list for reasons of national security warren lavorel a u s trade official defended the policies saying they did not violate gatt trade rules the surveillance body will send a record of today s talks to the trade negotiating committee which oversees the round to decide any further action on the charges the oil tax and customs user fee have already been the subject of formal gatt dispute panels set up outside the uruguay round to rule on the legality of the practices the ruling gatt council yesterday adopted a dispute panel s report and ruled that the u s superfund tax on oil imports breached trade rules it called on washington to modify its legislation mexico and canada along with the european community brought the dispute to the gatt last year reuter dupont unit raises crude oil postings conoco inc a subsidiary of dupont denemours dd said it raised the contract price it will pay for all grades of crude oil cts a barrel effective yesterday the increase brings conoco s posted price for west texas intermediate to dlrs a barrel the west texas sour grade at api now stands at dlrs a barrel light louisiana was also raised cts to dlrs barrel conoco last changed its crude postings on may reuter u s said unfairly protecting defense industry britain s defence minister george younger said the u s was unfairly protecting its defence industry and this could lead to british firms demanding counter measures younger told a u s chamber of commerce meeting that u s legislators were failing to realise the true nature of the two way street in terms of ideas technology and equipment a british parliamentary report said that up to march british firms had been awarded just mln dlrs worth of contracts for the strategic defence initiative compared with the billion dlrs britain had hoped to secure the committee said u s technology export restrictions and selectiveness towards foreign contractors had denied british competitors more lucrative orders and largely excluded them from technological research for sdi younger said london had given u s companies contracts under conditions of fair and open competition all we ask is for our companies to be given similar opportunities he added if new american legislation aimed at curbing unfair subsidies was used to exclude foreign suppliers it would not be surprising if british firms pressed for retaliatory measures younger said reuter u s canada ties seen worse without trade pact u s canadian ties could worsen if the two nations are unable to reach a free trade pact according to a study published by two nonpartisan public policy research groups the cato institute of washington and the fraser institute of vancouver said removing the remaining tariffs on cross border trade would benefit both countries but cato chairman william niskanen added the two nations generally harmonious trade relations are probably not sustainable without a new agreement the united states and canada whose cross border trade totaled about billion dlrs last year have been holding talks since last june on a pact to end the few trade barriers remaining between their two countries the u s put a deadline on the talks of october but both sides have said an agreement is likely despite tough bargaining remained niskanen said if no pact is reached bilateral trade ties could deteriorate because of congressional pressure on president reagan to implement trade laws more aggressively and this could hit some canadian trade practices he noted canada is seeking foreign investment in its auto industry which could put strains on the considerable bilateral free trade in u s and canadian autos and parts niskanen also said the canadian government is vulnerable to a resurgence of economic nationalism which could restrict u s exports to canada a free trade pact backed by president reagan and prime minister brian mulroney would open new markets for canada and enable its industries to achieve economies of scale which would also help it widen exports worldwide he said it would also increase the gross national products of both countries niskanen said the goal of a pact should be to end all tariffs within years lower subsidies on exports set rules for trade in services and investments end curbs on government procurement and agree ways to resolve trade disputes reuter shultz warns asean of looming trade problem u s secretary of state george shultz warned members of the association of southeast asian nations asean they could no longer rely on increased exports to the u s for growth given the importance of exports particularly export manufactures to all of your countries you are going to have to work hard to diversify your markets he said while you may be able to maintain your current market share in the u s you clearly will not be able to look to the u s to take major increases in your exports he added shultz told the foreign ministers of brunei indonesia malaysia the philippines singapore and thailand the u s would cut its huge foreign trade deficit more rapidly than many now believed he said asean s looming trade problems would not necessarily stem from protectionist legislation now being contemplated by congress but simply because of the adjustments the u s economy will have to make in order to service our large and growing external debt shultz said the u s deficit had resulted not from falling exports but from higher imports that had fuelled world growth reuter japan s june interim trade surplus narrows japan s custom cleared trade surplus narrowed to billion dlrs in the first days of june from billion a year earlier the finance ministry said the june interim surplus compares with a billion dlr surplus in the same may period fob exports in the first days of june rose pct from a year earlier to billion dlrs while cif imports rose pct to billion the average yen dollar rate used for the figures was yen against a year earlier reuter japan must try harder to cut surplus minister japan must try harder to reduce its trade surplus or the yen will come under renewed upward pressure economic planning minister tetsuo kondo he told a press luncheon he hoped japan could cut its current account surplus by some billion dlrs a year until it is reduced to some to billion dlrs in the fiscal year ended march the surplus totalled billion dlrs or about pct of gnp the billion yen economic stimulation package the government unveiled late last month would help slash japan s current account surplus by five to six billion dlrs he said reuter sri lanka plans to renew abu dhabi oil contract ceylon petroleum corp cpc has decided to renew its one year contract with abu dhabi for tonnes of upper zakum crude oil cpc officials told reuters they said cpc made the recommendation to the cabinet and is now awaiting its approval cpc s one year contract with abu dhabi expired on may this year and it wants the renewed contract to begin on june at the government selling price delivery will be determined in the course of the year last year shipments were in three parcels of tonnes each and four of tonnes each cpc officials also said the company agreed with the egyptian government for the supply of tonnes of gulf of suez crude for delivery in two shipments this year at the government selling price last year cpc bought tonnes gulf of suez through c itoh officials said plans to buy tonnes of basra light from iraq have not been finalised yet because of several constraints cpc said it could not accept tonne parcels and proposed to lift tonnes in eight shipments iraq national oil co inoc told cpc a red sea port where lifting was to take place could not accept small ships inoc then proposed to deliver eight shipments of tonnes each cpc said inoc planned to ship the oil to an indian port for delivery of indian requirements later going to colombo to offload cpc s needs but cpc considered this unsuitable cpc said it had not received a reply from inoc since december sri lanka imports all its annual needs of mln tonnes this year it plans to buy tonnes on the spot market compared with about mln tonnes last year reuter opec president lukman expects short calm meeting opec conference president rilwanu lukman said he expects next week s ministerial meeting in vienna to be brief and calm and that opec s current price and production agreement may only need a slight review i expect the meeting in vienna to be short and calm lukman who is also nigerian oil minister told reporters here ahead of his departure on sunday for the conference which starts june we already have an agreement which may need only a slight review lukman said the agreement reached at a long session of opec ministers in december last year pegged the group s crude oil output at mln bpd for first half at fixed prices of around dlrs a barrel since then prices have risen from dlrs in december to just above the official opec levels with oil industry analysts firmly convinced the organisation will maintain the agreement to keep the market stable i myself believe that opec will tend to take a position to strengthen the gains we have made so far lukman said he declined to say if the current ceiling should be maintained or raised to mln bpd for the third quarter and mln for the fourth as provisionally agreed last december whatever decision we arrive at will be guided by our collective will to keep the market strong he said he said non opec member norway which he visited two weeks ago had pledged further cooperation with the group and this was significant for its members lukman said heavy destocking by consumers early this year when opec s fixed price regime came into effect and a restocking now for the winter was responsible for current market strength reuter reagan says trade bill faces veto in present form president reagan said he would veto a house passed trade bill requiring mandatory retaliation for unfair trade if it reached its desk in its present form in a statement at a white house meeting with senate republicans on the legislation he said i would have no choice but to veto that bill in its present form he said the measure would move us exactly in the wrong direction towards high tariffs trade barriers trade distorting subsidies slow growth and crimped world markets and would destroy jobs reuter texaco canada raises crude oil postings canadian cts bbl light sweet now dlrs bbl texaco txc canada to raise crude oil postings texaco inc s texaco canada said it will raise postings for its edmonton swann hills crude by canadian cts a barrel effective june the company said the new posting for edmonton swann hills will be dlrs a barrel the price hike follows a round of crude oil price increases started late june by sun co the other major canadian crude suppliers raised prices june reuter african states agree to regional tariff cuts fifteen countries in eastern and southern africa have agreed to cut tariffs on regional trade by pct every two years up to a statement by the preferential trade area pta which seeks to create a common market stretching from ethiopia in the north to lesotho in the south said the governments would make the first tariff cut next year in they would assess the impact of the tariff reductions and work out a new timetable for the complete elimination of all barriers to trade by the year the pta set up in groups burnudi the comoros djibouti ethiopia kenya lesotho malawi mauritius rwanda somalia swaziland tanzania uganda zambia and zimbabwe pta sources said the agreement averted a split between members wanting more progress towards free trade and weaker states concerned about the effects on customs revenue the reductions cover only a common list of or so widely traded commodities and goods but pta sources said the organisation planned to expand the list to include items reuter u s oil prices strong ahead of opec meeting u s crude oil prices are at their highest level in more than a year ahead of next week s opec meeting even though most industry analysts do not expect any policy changes from the session they said prices which have steadily climbed since the organization s accord in december have risen on technical factors within the market and concerns about supplies because of the iran iraq war which could disrupt deliveries from the gulf the u s benchmark crude west texas intermediate is trading around dlrs in the july contract on new york mercantile exchange s energy futures and in the spot market that is its highest level since january opec conference president rilwanu lukman who is nigeria s oil minister said friday he expects the meeting in vienna to be brief and calm and that opec s current price and production agreement may only need a slight review although most industry experts expect just a reaffirmation of the december agreement oil prices continue to climb due to a desire to hedge positions in case of any surprises analysts expect the higher prices to continue until soon after the opec meeting at that point barring any increased tension in the gulf or changes in opec s policies prices should begin easing opec will probably not do anything it hasn t already agreed to in december because oil prices are firm said john hill a vice president at merrill lynch futures opec agreed in december to maintain official oil prices at dlrs a barrel and raise the group s production ceiling to mln barrels per day in the third quarter and to mln barrels in the fourth quarter this agreement helped send prices sharply higher rising from dlrs a barrel in early december several opec members who are price hawks including iran algeria and libya will seek a higher official price and a reduction in output and if u s west texas intermediate crude continues to trade above dlrs a barrel there is a greater chance that opec will raise its official dlrs price said nauman barakat analyst at smith barney harris upham and co but most analysts expect the more moderate producers such as saudi arabia to block any changes in policy the meeting will be a non event with no change in the official prices because opec and in particular the saudis are committed to stabilizing the market said rosario ilacqua analyst with l f rothschild however some analysts said opec may need to hold a meeting in september to re evaluate market conditions overproduction by opec will become a real problem in the fourth quarter when the quota is raised to mln barrels a day and iraq s pipeline through turkey brings another barrels to the market each day said john lichtblau president of petroleum industry ressearch foundation most expect saudi arabia to oppose a price increase at this meeting but many look for an increase by year end to dlrs to offset the decline in the dollar oil prices are denominated throughout the world in dollars so as the currency declines producers receive less money for their oil the only real production restraint in opec is saudi arabia said sanford margoshes analyst at shearson lehman brothers in the second half of the year we expect the saudis not to produce at their mln barrel a day quota and therefore act as a vehicle to stablize the market and pave the way for a two dlrs a barrel price increase at the december meeting he said one uncertain factor is the course of the iran iraq war the wild card is the increased tensions in the persian gulf said frank knuettel analyst with prudential bache securites oil tankers taking oil from iraq and kuwait have been regular targets for iranian planes the reagan administration is planning to put kuwait tankers under the protection of the u s flag with naval escorts extra oil inventories are needed during a time of crisis like this and just general nervousness over an incident that could disrupt oil supplies drives prices up knuettel said reuter unocal ucl scraps fluidized bed boiler project unocal corp said it told the u s treasury department that it will not include fluidized bed combustion technology a method for the more efficient burning of solids at its parachute creek oil shale project in colorado due to high costs under a agreement with the now defunct u s synthetic fuels corp unocal said it would study using the technology at the oil shale plant in return the company would have been eligible for mln dlrs in loan gaurantees and price supports from the u s treasury department which took over the contract from the synthetic fuels corp unocal said unocal said its studies showed the cost for the fluidized bed combustion facility would have exceeded mln dlrs compared with an original estimate of mln dlrs the fluidized bed facility would have provided heat and electricity for the oil shale project unocal said last year s fall in oil prices and the loss of investment tax credit under the tax reform act made the project uneconomical even with government price supports and loan guarantees unocal said the parachute creek oil shale plant produces about to barrels per day of crude shale oil unocal said reuter civil service strike delays u k trade figures civil service industrial action started early this month will delay the publication of may s u k overseas trade figures which had been due out next thursday a trade and industry department statement said a department spokesman said the figures will probably be put back by about a month the june trade figures due in late july will also be delayed he added reuter latin caribbean nations oppose trade bills a group of latin american and caribbean nations formally opposed trade legislation pending in congress saying it would curb their exports slow development and hinder its ability to repay foreign debt mario rodriguez montero president of an organization of american states special committee on trade said he was aware of the large u s trade deficit but added the region should not be the one affected by the trade bills he said the causes of the deficit were the strong dollar and the budget deficit and it is regrettable to solve it by a trade bill that would only serve private u s interests rodriguez made the comment at a news conference after two days of meetings with u s officials on trade bills now in congress that are designed to reduce the u s trade deficit which last year hit a record billion dlrs congressional observers say the bills are aimed mainly at japan taiwan south korea and a few other nations with large annual trade surpluses with the united states mexico brazil and venezuela are the only latin nations with large trade surpluses last year with the united states but even mexico with the largest had a surplus of only billion dlrs against japan s of billion dlrs the european community has also opposed the bills rodriguez said the latin and caribbean nations backed the reagan administration s opposition to many of the sections in the legislation including those to curb imports and to require retaliation for foreign unfair trade practices he told reporters the committee would likely mount a campaign to fight the legislation when it comes up for debate on the senate floor expected next week rodriguez said the region needs trade to continue development we hope this need will not be affected negatively by trade legislation rodriguez said we need to keep the market opens especially the u s market to obtain the necessary foreign exchange not only to service the debt but also to continue national development progress president reagan has said he would veto any legislation he termed protectionist and his aides now are mounting a effort to water down some of the objectionable provisions in the legislation asked whether reagan was ready to cast a veto rodriguez said as yet the administration is not in a veto frame of mind reuter u s business loans fell mln dlrs business loans on the books of major u s banks excluding acceptances fell mln dlrs to billion in the week ended june the federal reserve board said the fed said that business loans including acceptances fell mln dlrs to billion dlrs reuter u s asks congress to revise tariff categories the administration asked congress to replace the u s tariff schedule with a new system to bring it into line with international tariff categories u s trade representative clayton yeutter said the new system will add such items as fiber optics and more accurately define new composites items not widely traded when the current schedule was devised some years ago yeutter said the harmonized system as the new schedule is called will change tariff categories and definitions to meet the present day needs of exporters and importers but they should pay about the same rates of duties yeutter said american exporters will find it far easier to deal with one standardized worldwide system than the variety of differing systems which they now face he said the new system ended years of multinational negotiations to create the unified tariff schedule yeutter said government and business moves are based on data from tariff schedules and the new system will improve knowledge of trade flows and the quality of decision making he said nations pledged to bring their standards under the new system with about half expected to join the system by january reuter venezuela probes alleged foreign exchange fraud banking authorities and police are investigating an alleged fraud by the second largest trading house in the caracas free foreign exchange market finance minister manuel azpurua told reporters the superintendency of banks and the technical and judicial police have both begun probes of cambio la guiara azpurua said on friday night police said the owners of the firm mario muggia and his brother luigi muggia have left venezuela cambio la guiara operated in part on the parallel market in which traders buy and sell dollars among themselves the venezuelan central bank on june suspended the licences of all foreign exchange operators in the parallel market blaming their speculation for the constant rise in the value of the u s dollar here juan domingo cordero vice president of the caracas stock exchange and the owner of a foreign exchange trading house said on friday he had begun legal action against cambio la guiara for issuing him four checks without funds for a total amount of almost one mln dlrs the cambio la guiara exchange house had operated in venezuela for more than years reuter santos says it has significant oil find santos ltd stos s said it had made a significant oil discovery at its mawson one well in the moomba block of the cooper basin south australia it said the well flowed oil from sands at an average rate of barrels per day from to metres through a mm choke santos said the well was cased and suspended pending further evaluation but it said the proximity of the discovery to existing production facilities at the gidgealpa south field would allow mawson one to be brought into production rapidly santos has a pct stake in the block delhi petroleum pty ltd has pct and south australian oil and gas corp pty ltd has pct reuter far east traders expect dlr oil in january opec s agreement to limit output to mln barrels per day bpd for the rest of the year should boost spot prices and enable the group to raise its official reference price to dlrs a barrel in january from the current dlrs far east oil industry sources said fundamentally the market situation is bullish and the official price will be dlrs in january a japanese refiner said the sources said that in spite of over production by opec members such as iraq the united arab emirates kuwait and qatar demand should exceed supply by the fourth quarter spot oil prices surged on friday in late u s trading as the market anticipated an opec agreement on second half output in early tokyo trade levels were firm at dlrs for mideast dubai cargoes loading next month and dlrs for u k brent traders said they said they expect more foreign crudes to be sucked into the u s market as the benchmark crude west texas intermediate wti trades at around dlrs with wti at or dlrs u s refiners will import mideast and far east crudes and this will strengthen those grades further said a japanese oil trader some tokyo traders were cautious about whether thu spot market has further upward potential in the short term having risen strongly on the opec news on friday you could certainly argue that if new york rose on that basis there s no reason for prices to go up again today said one international oil trader in tokyo but i think if there s any sign of a dip it will be bought back up again pretty quickly he added one oil industry analyst concurred there is no reason to expect a weak market from now on he said he expected opec to raise prices to dlrs when it meets on december oil sources said spot prices are unlikely to surge strongly in the next few months due to cheating by some opec members and the likelihood that saudi arabia will act as swing producer to maintain steady prices iraq is currently producing around two mln barrels per day compared to its second half quota of mln they said its export capability will rise to mln bpd when a new pipeline through turkey comes onstream in or around september qatar is said to be achieving sales of around bpd against its opec assigned quota of by discounting up to cents a barrel from official prices the sources said iran the united arab emirates and kuwait are also cheating on the opec agreement with over production and effective price discounts through counter purchases industry sources said but they mostly agreed that saudi arabia will unofficially act as swing producer cutting production to compensate for higher output by other members or boosting output if spot prices rise too high too fast saudi arabia has a floating oil stockpile of to mln barrels saudi arabia wants oil price stability so the stockpile may be utilized to cool down the market if it rises too much an oil industry analyst said reuter saudi oil company gets new acting governor the acting governor of saudi arabia s state owned oil company petromin jamal hassan jawa has retired at his own request oil industry sources said they said ali ibrahim rubaishi head of organisation planning in petromin would take over as acting governor jawa held the post since his predecessor abdul hadi taher left in a major oil industry shake up last december the sources said rubaishi had not been expected to hold the post permanently the government removed taher and oil minister ahmed zaki yamani from their posts late last year in a move which industry sources said was aimed at coming to grips with a buyers oil market the two men had run the saudi oil industry for more than years industry sources said that despite huge resources saudi arabia had been unable to mould an oil marketing strategy tuned to the competitive realities of the s glut hisham nazer who replaced yamani successfully led an opec engineered return to fixed oil prices of dlrs a barrel last december nazer is believed to be reviewing saudi oil operations which could lead to a thorough overhaul in the way saudi arabia does business the sources said the sources had said possible candidates for the governor s job include prince abdul aziz ibn salman ibn abdul aziz who earlier ran a research center at saudi arabia s university of petroleum and minerals and former deputy planning minister faisal beshir they also list abdulla bakr president of the university of petroleum and minerals economist ali jonahi ahmed shinawi and zuheir masoud director of jeddah islamic port reuter uae oil minister oteiba visits egypt agency uae oil minister mana said al oteiba arrived in alexandria last night for a visit to egypt the national middle east news agency mena said it said oteiba who had just attended the opec ministerial meeting in vienna would stay for several days but gave no details non opec egypt has pledged to restrain output to support opec s moves to boost oil prices oil minister abdel hadi kandeel last week said egypt plans to leave its oil production of barrels per day unchanged for the next five years egypt is able to produce up to one mln bpd reuter norway extends pct oil output cut ministry norway will extend its pct cutback in planned north sea oil output in support of opec from july until the end of this year oil ministry spokesman egil helle told reuters we took a very positive view of the opec meeting in vienna he said the accord reached there means stability in the oil market and we shall continue making our contribution the cuts originally brought in from february would probably be officially approved on july by parliament helle said the ministry had written to norway s oil companies and would now discuss with them how best to implement the cuts opec agreed this weekend in vienna on an output ceiling of mln barrels per day bpd for the rest of and retained the fixed prices that were set in its december accord based on an dlr per barrel reference point opec s first half output ceiling was mln bpd and it s december pact had provisionally set a third quarter ceiling of mln bpd rising to mln in the fourth quarter norway which pumps around one mln bpd from its offshore fields previously said it would continue its output curbs from planned production for the rest of the year if opec remained within its december accord on output and prices norway s oil production rose pct to an average of around bpd in since then it has risen to around one mln bpd and is expected to reach about mln bpd by the pct cut from planned production implemented since february reduced norway s oil output by about bpd norway s oil minister arne oeien currently in iceland for a meeting of nordic ministers has made no official statement on the latest oil production cutbacks over the past year several other leading non opec producers including the soviet union mexico china malaysia and egypt have also pledged support for opec s bid to keep prices stable norway decided on the initial round of cuts following an opec agreement last december which boosted oil prices to around dlrs per barrel from around to dlrs last december norway relies on oil for about pct of its total export earnings and was hit hard by the collapse in the oil price during the first half of but firmer oil prices since then have brought some stability to the economy and helped narrow the foreign trade deficit norway s north sea neighbour britain has consistently refused to cooperate with opec output cuts saying it is up to the producing oil companies to set the levels of production reuter bangladesh s trade gap to widen in bangladesh s trade gap is expected to widen in fiscal beginning on july after the government relaxed restrictions on some imports including luxury cars the country has set its export target for the year at billion u s dlrs against imports of billion dlrs compared with s one billion dlrs of export earnings and billion dlrs of imports commerce minister mohammad abdul munim said the changes were aimed at encouraging export oriented industries to boost foreign exchange earnings and imports of essential machinery and raw materials to increase industrial production the government was easing procedures to enhance incentives especially for exporters of textiles and frozen food and importers of industrial machinery and raw materials munim told reporters commerce ministry officials told reuters the import policy covered only commercial imports amounting to billion dlrs imports of capital machinery and foodgrains by the government were not included in the policy they added they said the country s total import bill both commercial and other imports was expected to reach billion dlrs in the new year compared with billion dlrs in the minister said ending restrictions on imports of cars and dropping pct sales tax on small cars would not harm the economy munim said bangladesh feared a further drop in prices for its main export jute which will certainly affect our export earnings in the coming year bangladesh s jute exports fell to mln dlrs from mln in according official figures but munim said exports of non traditional items which accounted for over pct of total exports this year would play a key role in achieving the export target reuter ec u s remain divided over pasta dispute top level talks last week between the european community ec and the united states failed to resolve a dispute over pasta which may provoke new trade frictions next month diplomatic sources said the u s insists the ec complies with what it regards as an unambiguous ruling from the world trade body gatt and dismantles an export subsidy system which has led to italy taking an increasing share of the u s pasta market the sources said the ec which currently provides subsidies of around cents a pound offered a compromise in last week s talks in brussels but that this was rejected by the u s u s assistant special trade representative jim murphy has returned to washington ahead of a theoretical july deadline for agreement set last august when the two sides resolved a related dispute over ec restrictions on u s citrus imports the diplomatic sources said the citrus issue could be reopened if the pasta dispute was not solved quickly it was also possible the u s would reimpose a pct tariff on ec pasta lifted when the citrus row was settled but the two sides may agree to extend the deadline for a few days as ec commissioners willy de clercq and frans andriessen are due to visit washington from july to reuter extracts from opec communique following are extracts from the communique issued at the conclusion of the opec conference here the conference expressed satisfaction about the positive results of the agreement signed in december by which opec re established the system of fixed price at a level of dlrs per barrel supported by opec production ceilings distributed into national production levels the conference noted that all market indicators including spot prices in the market and netback values of all opec crudes have been firming up significantly thus consolidating the opec price structure as defined by the agreement the conference examined the supply demand outlook for the second half of the year and decided that in order to secure continued firm prices in the market opec production during the fourth quarter of will be equal to that of the third quarter i e mln barrels per day bpd distributed into the same national production levels as were defined by the above mentioned agreement for that quarter furthermore the conference decided to establish a committee of five heads of delegation to monitor the price evolution in the market in relation to the opec official prices in order to secure price stability around the opec price structure should there be any significant change in market prices the committee would immediately call for an extraordinary meeting of the conference with a view to deciding on the necessary opec production levels during the second half of the year which would secure the desired market stability the conference reiterated the necessity of member countries strict adherence to the agreement signed in december both in terms of official price and national production levels for this purpose the conference decided to establish a committee of three heads of delegation to undertake visits to member countries in order to motivate them to comply with the terms of the agreement moreover the conference stressed the necessity of the cooperation of the oil producing exporting countries outside opec as an essential prerequisite for a lasting market stability the conference therefore decided to reinstate the group of five heads of delegation established by the th extraordinary meeting of the conference in april to undertake the necessary contacts with those countries the conference observed the continued fall in the value of the u s dollar and agreed that the matter should be studied and reported to the next meeting of the conference the conference discussed the appointment of the secretary general and decided to discuss the matter again in its next ordinary meeting the conference extended the term of office of fadhil al chalabi as deputy secretary general for a period of one year from october the next ordinary meeting of the conference will be convened in vienna on december reuter kuwait sees opec output over ceiling to end year opec output for the second half of including that of iraq will be above the official mln barrels per day bpd output ceiling agreed by opec saturday kuwait oil minister sheikh ali al khalifa al sabah said iraq refused to sign the pact by which opec maintained its ceiling at mln bpd for both the third and fourth quarters of in december opec set a provisional fourth quarter level of mln bpd now cut back to the third quarter target ali told a news conference that including iraq opec third quarter output will be between and mln bpd while fourth quarter output will be nearly mln bpd ali did not detail what effect he thought these production levels would have on prices iraq has an official first half quota of mln bpd rising to mln in the second half but has refused to adhere to it and has recently been producing around two mln barrels per day exporting it through pipelines to saudi arabia and turkey iraq s export capacity will be further boosted when a bpd oil pipeline via turkey comes on stream in about september iraq has been insisting on a quota equal to its gulf war enemy iran which has a quota of mln bpd rising to mln in the second half ali said the position of the bpd production from the neutral zone between saudi arabia and kuwait which has been supplied to iraq as war relief crude was fixed we will not discuss it there will not be any change he said ali said the conference which began thursday and ended saturday evening had been too short for all necessary problems to be adressed we are overdoing it in holding too short a meeting we sweep a lot under the carpet he said ali said the problem of price differentials between the prices of various opec crudes had not been dealt with properly at the meeting ali said the problem of differentials is a real one i would hate to be producing today a light crude and that problem has not been dealt with properly light crudes are overpriced relative to heavy crudes asked if the issue of differentials would be raised at the next opec meeting to be held in vienna on december ali said if my crudes are affected i will raise the issue i will not do the work of another minister kuwait s own crudes range from medium to heavy grades opec reintroduced fixed prices on february with a spread of dlrs a barrel between its lightest and heaviest crudes reuter iraq rejects new opec oil quota iraq has rejected its new opec production quota set in vienna for the second half of this year the official iraqi news agency ina reported it quoted oil minister issam abdul rahim al chalabi who returned sunday as saying iraq will continue to adhere to its position considering itself as not included in the agreement last december iraq rejected its assigned first half quota of mln bpd and demanded a share equal to the mln bpd quota set for iran its enemy in the nearly seven year old gulf war the accord reached by opec ministers in vienna saturday set an output ceiling of mln bpd for the group s members from july to december raising iraq s share to mln bpd and iran s to mln reuter german may trade surplus billion marks april surplus billion official armistice eludes ec and u s in spaghetti war talks between the european community ec and the united states have failed to settle a trade dispute over pasta an ec commission spokesman said diplomatic sources said the dispute could provoke new trade friction unless it was settled soon washington is insisting that the ec comply with what it regards as an unambiguous ruling from the world trade body gatt and cut export subsidies which have allowed italy to take an increasing share of the u s pasta market the ec provides subsidies of about cents a pound on pasta exports the spokeswoman said the talks foundered on the question of how much the subsidy should be cut reuter chevron n sea find may hold mln bbls analysts a north sea oil find announced by chevron corp s chv chevron exploration north sea ltd may indicate a new field with recoverable crude oil reserves of mln barrels industry analysts said chevron said a sidetrack well on block on the u k continental shelf tested barrels per day bpd of api crude oil from the tertiary alba sand through a three inch surface choke the estimated amount of oil at the alba field is around mln barrels paul spedding of stockbroker kleinwort grieveson and co told reuters he said industry estimates put the total reserves at the field at over one billion barrels but given the low gravity of oil the recovery rate would be expected to be around pct analysts said the results were encouraging but the potential difficulty of operating and recovering oil in the field was shown by the fact that the first well had to be plugged and a sidetrack drilled the field seems to be shallow and widespread which will require a multi platform development in recovery pushing costs up christopher osborne of stockbroker hoare govett said most analysts said that although the low gravity of the oil found would require additional costs in recovery the test well showed that it flows well although the gravity of oil at the field seems to be low it seems to flow quite well and around mln barrels could be recovered carol bell of phillips and drew told reuters however chevron officials declined to comment on the analysts reserve estimates they said that without further research and drilling in the area this summer they would not disclose any reserve figures analysts said that if the field were declared commercial and developed there would be a ready local market for the heavy crude it produced most refineries are now upgraded to refine heavy oils and the price differentials between heavy and light crudes are a lot narrower today osborne said chevron operates the block on behalf of companies which include british petroleum development ltd dsm hydrocarbons uk ltd enterprise oil tns ltd marathon int pet gb ltd and phillips petroleum co u k ltd reuter ecuador to produce above opec quota minister ecuador will produce crude oil in excess of its bpd opec quota during the second half of this year energy minister fernando santos alvite told a news conference ecuador plans to produce bpd in august rising to bpd next january the minister said we will be producing more than the quota to pay off the crude and products we have been lent by venezuela nigeria and kuwait and to compensate for the crude we have been unable to produce during the past few months he said earthquake damage to a pipeline sharply cut ecuadorean production from march to may this year santos said the move had been explained to fellow opec members during last week s meeting in vienna when an increase in ecuador s quota to bpd from was approved they understood our position and we believe we remain within the spirit of the quota agreement he said immediately before the march quake ecuadorean production was bpd with bpd exported while its production was down venezuela nigeria and kuwait loaned ecuador a total mln barrels of crude and four mln barrels of products santos said reuter venezuela budget sees dlrs oil price venezuela s government tomorrow presents a budget proposal for billion bolivars based upon an oil price of dlrs per barrel finance minister manuel azpurua said azpurua told reporters after a cabinet meeting the new budget projects ordinary income of billion bolivars and extraordinary income of billion oil revenues are expected to produce billion or pct of the total the finance minister said the oil revenue projection is based on an average price of dlrs per barrel in venezuelan oil through the first half of has averaged dlrs per barrel according to the state oil company petroleos de venezuela s a reuter miyazawa says g still supports louvre accord japanese finance minister kiichi miyazawa said the group of seven g nations still support the louvre accord to stabilise currencies he also told a news conference following a cabinet meeting that the group of five g and g do not have any plans to meet for talks the finance minister further said that overseas stock market plunges will not lead to a freefall in the tokyo stock market there is no special worry about the stock market in tokyo he added miyazawa said the tokyo stock market should not be gravely affected by the downturns of markets in new york and london because there is a clear sign of an economic recovery in japan and stability of exchange rates asked if the u s had contacted japan after the stock market plunge in new york miyazawa said there was not any contact reuter miyazawa says baker s remarks were aimed at just reaffirming louvre agreement baker remarks aimed at confirming accord miyazawa japan s finance minister kiichi miyazawa said that remarks by u s treasury secretary james baker on sunday that some nations were not abiding by the spirit of the louvre accord were just aimed at reaffirming that agreement the agreement to cooperate in stabilising currencies was reached in paris in february this year the finance minister made the remark at a news conference which followed a morning cabinet meeting reuter venezuela sees flat oil price despite u s attack world oil prices would remain stable despite the u s attack against iranian oil platforms and growing tension in the gulf venezuelan energy minister arturo hernandez grisanti said on monday he described the situation as extremely tense but said gulf military activity would not significantly affect prices because supply and demand were roughly equal demand for opec crude in the final quarter of was mln barrels per day bpd and the group s members were now pumping above mln bpd he told a news conference hernandez grisanti said the supply demand balance was precarious and prices were in danger of falling from their current average of about dlrs per barrel if overproduction continued three or four members of the nation organisation of petroleum exporting countries were overproducing in an exaggerated manner above their assigned quotas he said opec s overall ceiling is mln bpd reuter if dollar follows wall street japanese will divest if the dollar goes the way of wall street japanese will finally move out of dollar investments in a serious way japan investment managers say the japanese the dominant foreign investors in u s dollar securities have already sold u s equities but if the dollar falls steeply which did not happen yesterday japanese investors will definitely try to withdraw significant funds from u s shares said akira kawakami deputy manager of nomura investment trust and management co ltd s international investment department an unstable lower dollar would also affect japanese investment in u s bonds japan u s interest rate differentials which currently look wide enough mean nothing in the absence of dollar stability said kawakami u s bonds could benefit due to a gloomy economic picture following the estimated huge losses in stocks by major u s institutional and individual investors he said the effect should be to rule out any u s interest rate rise but most japanese investors in u s bonds are still wiating to see if the dollar really is stable he said the dollar was holding firm at above yen on tuesday morning although japanese investors sold huge amounts of stocks in new york yesterday most are still looking for chances to lighten their u s stock inventories hiromitsu sunada manager of meiji mutual life insurance co s international investment department said their sales helped send wall street stocks down points to the market s biggest percentage drop since investment in u s stocks and bonds is difficult considering the dangers said katsuhiko okiyama deputy general manager and chief adviser of yamaichi securities co ltd s fixed income securities marketing group japanese investment at home could start to pick up once markets have stopped reacting to wall street the managers said the tokyo yen bond market is likely to stabilise in one or two weeks which is what investors have been waiting for the bottom for yen bonds should be around a pct yield for the pct th bond they said the basic background which has supported the stocks and bonds markets has not changed said norio okutsu assistant general manager of nikko securities bond department but new outflows of funds to the u s will be decreasing however this was already evident three months ago he said reuter malaysia advised to raise crude oil output in malaysia s national oil company petronas has advised the government to raise crude oil output to barrels a day bpd in from a current bpd a senior company official said we have the capacity to produce the amount rastam hadi petronas s vice president for upstream sector said the government will announce its decision on friday when it unveils the country s budget malaysia raised output this month to current levels from bpd after reviewing the world oil market in may malaysia cut output to bpd from in response to a call by opec to boost prices reuter sumita welcomes u s west german joint confirmation of louvre accord sumita welcomes u s japan agreement on louvre bank of japan governor satoshi sumita said he welcomed monday s u s and west german joint confirmation of their commitment to the louvre accord sumita said in a statement that world stockmarkets were excessively concerned about the economic future the bank of japan will continue to adhere to a system of policy coordination based upon the louvre accord of february he said the accord called for stability in foreign exchange rates exchange rates generally are regaining stability and the economies of industrialised nations are heading for a steady recovery he said reuter new zealand will continue firm monetary policy the reserve bank of new zealand said there was no evidence to suggest the fall in share prices had affected financial stability and it would maintain its firm monetary policy governor spencer russell said in a statement the central bank did not accept arguments that the battle against inflation should now take a low second priority after the sharemarket s plunge russell said the bank had two statutory responsibilities to implement the government s monetary policy to bring down inflation and to ensure the financial sector s stability unless the bank is directed otherwise the firm monetary policy will continue because it is very much in the national interest that it do so he said and there is yet no evidence available to the bank to suggest that the fall in share prices has affected the stability of the financial sector the barclays share index fell a record points to on tuesday a decline of pct reuter stoltenberg says meeting with baker underscored monetary cooperation stoltenberg says baker meeting underscores accord west german finance minister gerhard stoltenberg said the meeting on monday with u s treasury secretary james baker underscored the determination of the u s and west germany to continue close cooperation to stabilise foreign exchange rates stoltenberg told a news conference the statement released yesterday monday after the private meeting emphasized our determination to continue the close economic cooperation regarding foreign exchange stabilization and monetary policy stoltenberg said that he baker and bundesbank president karl otto poehl had a very constructive discussion and had all reached a positive evaluation of the louvre accord during their meeting on monday stoltenberg said initial contacts with several european counterparts showed that they shared this view we expect the declaration of our unified position to have a positive effect he said he noted that the dollar firmed again in late u s trading after the outcome of the baker meeting was published reuter louvre accord vital to w germany stoltenberg west german finance minister gerhard stoltenberg said the louvre accord was vital to west germany stoltenberg told a news conference given west germany s unusually high dependence on world trade and exports it is vital for west germany to continue its constructive contribution to trusting international cooperation on the basis of the louvre accord some monetary analysts have speculated that inflation conscious bundesbank vice president helmut schlesinger may have been leading the central bank to a course of tighter monetary policy stoltenberg is due to attend a routine bundesbank meeting on thursday in west berlin he declined to forecast what if any policy decisions the bundesbank might take reuter stoltenberg does not rule out central bank intervention to stabilize currencies further marked dollar fall would burden u s trade deficit stoltenberg stoltenberg declines comment on possible changed targets for currencies stoltenberg declines comment on currency zones west german finance minister gerhard stoltenberg declined to comment on whether unpublished target zones for currencies agreed at last february s louvre accord had been changed as a result of the meeting on monday with u s treasury secretary james baker he was asked about target zones at a news conference in bonn stoltenberg referred to a statement released after monday s meeting which said continuing cooperation was aimed at promoting currency stability at current levels this was the same formula used in the text of the louvre accord he noted reuter stoltenberg does not rule out intervention west german finance minister gerhard stoltenberg said he could not rule out the possibility of central bank intervention to support currencies asked at a news conference whether central banks were prepared to intervene to defend currencies he said we cannot rule out the use of any instrument which leads to foreign currency stability however he added that in the end it was market forces which prevailed reuter iran says u s raid caused mln dlrs damage u s attacks on two iranian oil platforms in the gulf both of which were still blazing caused damage estimated at mln dlrs tehran radio quoted iranian oil minister gholamreza aqazadeh as saying the rigs one of which was heavily shelled by four american destroyers on monday were still burning almost hours after the attack and could cause widespread pollution in the gulf the minister told a news conference in tehran he said the reshadat rigs miles km east of bahrain in international waters were in the final stages of reconstruction after an attack by iraqi jets last year reuter indonesia says it will extend oil contracts indonesia told the oil industry on tuesday it will extend contracts on producing blocks and improve the investment climate but wants to see increased expenditure on exploration in return president suharto in an opening speech to the indonesian petroleum association said indonesia was ready to extend contracts held by foreign oil companies on producing areas in order to boost investment in the petroleum industry the government of indonesia has basically approved of extending production sharing contracts under the present laws suharto said apart from that the government will keep improving the investment climate in order to accelerate the development of the petroleum industry he said indonesian energy minister subroto told the association he was aware that the oil industry needed to be assured that contracts on blocks expiring within the next years would be renewed before they would invest in further exploration as we all have heard this morning the president is fully aware of this situation subroto said the government has already made the political decision to entertain this time problem by inviting the existing producers to continue their activities in indonesia albeit on a selective basis indonesia one of the members of opec must find new oil reserves if it is to remain an exporter in the next decade oil industry sources say subroto said the government was also working to ease other problems including granting easier terms for remote areas or deep water conditions but subroto said relations with oil companies were two way and that they should step up expenditure on oil exploration now that the oil price had recovered president suharto said he wanted to see greater transfer of technology to indonesian companies and more help from the oil industry for the regions in which companies operated abdul rachman ramly the president of state oil company pertamina has said that budgeted exploration and production expenditure for all oil companies in indonesia was forecast to fall to billion dlrs in calendar from billion in pertamina has production sharing or joint operation contracts with foreign oil companies subroto said speeding up necessary approvals for field operations was a government priority there had been misunderstandings between the government and the oil industry in certain areas such as when a field is designated commercial and a thorough evaluation was being made he said the government wanted to finalise contract extensions as soon as practical and urged the industry in the meantime to maintain its exploration drive subroto said indonesia needed the companies to maintain exploration efforts even if their contract was due to expire within years this need in itself is some sort of guarantee that we will soon have to come up with an extension agreement eleven major contract areas are due to come up for renewal between and industry sources said extension of the contracts on the blocks has involved detailed negotiations but so far no extension has been granted subroto told reporters afterwards that contract extensions would be selective based on how much capital would be invested reuter louvre reaffirmation not enough u k analysts u s and west german reaffirmation of support for the louvre accord cannot cure the fundamental problems bedevilling the world economy which lie behind the current collapse in stock markets london economists said there s going to have to be some acknowledgement that the dollar is going to be allowed to slip said richard jeffrey of hoare govett if not there is going to be continued fear that when pressure emerges on the dollar the fed will be forced to tighten this throws up the economic abyss of recession in the u s with obvious knock on effects on the rest of the world but some economists added that wall street s crash which dragged other major markets down with it may help curb the very problems that sparked the turmoil namely world inflation fears and the massive and persistent u s trade deficits if there is a benefit from a pct fall in wall street it s some sort of resistance to inflation worldwide said geoffrey dennis of brokers james capel echoing comments from other london and tokyo analysts lower personal wealth from lower stock prices and fears of further falls should dampen credit growth curbing inflationary pressures and import demand in the u s they say such considerations may be helping bond markets resist the equity crash according to mike osborne of kleinwort grieveson it would be suicidal for any government in the context of what happened in the last couple of days to jack up their interest rates he added stocks surged after news chemical bank cut its prime lending rate half a point to pct tuesday and u s fed chairman alan greenspan pledged support for the financial system the news eroded the most immediate fears that the stock collapse would spill over into the economy via a banking crisis for example thus precipitating recession it also helped the dollar rally sharply to a high of marks from a european low of but economists said today s whiplash moves do not have long term significance and that markets should try to keep the underlying fundamentals in mind the united states has been able to live on borrowed time if the effect of this crash is to produce slower economic growth not recession it contains good news and provides a more realistic assessment of the u s economy said capel s dennis but he added that markets are still very much in danger the liquidity doesn t disappear all it s doing is disappearing from the equity markets dennis noted david morrison of goldman sachs international said world market turbulence will be exacerbated if the group of seven g leading western nations confirms a base for the dollar as implied by west german finance minister gerhard stoltenberg s remarks that intervention to support currencies is still on last week s dollar fall was partly triggered by expectations that the germans were more worried about the money supply impact of such intervention than maintaining currency stability but rigid adherence to dollar ranges would be bad said morrison the louvre accord is fundamentally misconceived to stabilise the dollar at too high a level is wrong he said reuter norway boosts oil output by pct in september norway s september oil output rose by pct to mln barrels per day bpd from bpd in august according to a reuter survey of firms operating here operators said the sharp rise reflected higher output at several of norway s biggest fields and resumed production at fields shut down for days in august for the ekofisk field rescue project industry analysts said the increase did not exceed norway s voluntary move to curb by pct planned growth in its oil output a move designed to back opec led efforts to stabilise oil prices by limiting supplies to world crude markets norway not an opec member decided in june to extend the production restraints enforced since february on all its north sea fields for the rest of the year oil minister arne oeien said last month he expected norway would extend into its policy of slowed production growth the biggest increase was seen on the ekofisk field which pumped bpd in september against bpd in august field operator phillips petroleum norway inc said ekofisk and the nearby valhall and ula fields which use the ekofisk pipeline were shut down for most of august while phillips raised ekofisk platforms to counter seabed subsidence bp petroleum development norway ltd operator of the ula field said september output rose to bpd after dropping to bpd in august because of the shutdown valhall operated by amoco norway a s flowed bpd last month compared with bpd in august the company said september production was also sharply higher at the statfjord field norway s pct share of statfjord which extends into the british north sea sector was bpd against bpd in august operator den norske stats oljeselskap a s statoil said norway s pct share of the murchison field which like statfjord extends into the british sector yielded bpd in september a slight bpd decrease from the previous month norwegian partners on the british operated field said statoil boosted output at its gullfaks field to bpd in september compared with in august norsk hydro operator of the oseberg field said test output at the field from the mobile production ship petro jarl totalled bpd last month down sharply from bpd in august hydro said the drop was caused by failure to bring on stream a second well cutting september production to just two days reuter poehl says chances for exchange rate stability are good balladur has had contact with g ministers french finance minister edouard balladur has been in contact with several finance ministers from the group of seven leading industrial countries in particular west german finance minister gerhard stoltenberg to discuss the crisis on world markets finance ministry sources said they did not say whether the contacts had led to concerted action on the markets or merely an exchange of views but they added that french ministry officials were continuing the contacts to exchange views on market performance reuter poehl sees good chances for currency stability bundesbank president karl otto poehl said there were good chances for exchange rate stability the chances for exchange rate stability are good he told reporters reuter phillips p raises crude oil prices phillips petroleum corp said it raised the contract price it will pay for all grades of crude oil by cts a barrel effective oct the increase brings the company s postings for the west texas intermediate and west texas sour grades to dlrs a barrel phillips last changed it crude oil postings on sept reuter iran soviets to hold talks on oil exchange deal iran and the soviet union have provisionally agreed to hold talks on a possible exchange of iranian crude oil for finished soviet oil products an official spokesman said tuesday gennady gerasimov chief of the soviet foreign ministry s information directorate told reporters the agreement had been reached during a visit to moscow last week by iran s oil minister gholamreza aqazadeh gerasimov said no date had been set for the talks which would also study the possibility of soviet technical assistance for iran s oil industry reuter lyng defends u s export subsidy program u s agriculture secretary richard lyng said the united states will continue its policy of subsidizing farm exports to regain lost markets until there is a global agreement to end such subsidies in an interview with reuters lyng also acknowledged he was troubled by the prospect that the export enhancement program eep could prove so indispensable to boosting u s exports that the u s would have difficulty abandoning it yes i m troubled with that a little bit he said there s no question about it the longer you feed the calf on the cow the longer it is to wean it in recent months usda has offered subsidies on a growing list of commodities to an increasing number of countries lyng called u s and european community export subsidies just plain nonsensical as a long term policy and said he saw an end to the expansion of the eep i m sure there s an end to the expansion but we are doing this to accomplish our goal which is to regain the markets that we ve lost to keep our products competitive and to let those particularly the european community who we are convinced are the worst offenders in terms of the export subsidization that we are prepared to continue to do this until we can come to some agreement to put an end to it he said reuter soviet oil output target at mln tonnes the soviet oil production target for has been set at mln tonnes a rise of eight mln tonnes over this year s planned output oil minister vasily dinkov announced the figure on tuesday at the supreme soviet the country s nominal parliament he said a new development strategy fuller use of oil deposits and better housing and pay for oilmen had allowed an upsurge in the oil industry after three years of stagnation which began in late last year the soviet union produced mln tonnes of oil slightly short of the target of mln january september figures released at the weekend showed soviet oil output in the first nine months of this year at mln tonnes the target is million dinkov said the soviet union would develop new oil deposits in the coming year he called for speedier geolog prospecting across the country to spur the oil industry the supreme soviet convened on monday to endorse the budget and plan the session is expected to end on tuesday reuter lawson says u s west german row was unnecessary u k chancellor of the exchequer nigel lawson said the recent dispute between the united states and west germany over economic policy was responsible for much financial turmoil and that it should never have happened he said in a television interview the dispute had fanned fears of a breakdown in the cooperation which is so important between finance ministers of the major nations he said the dispute was a row which should not have happened and agreed that much of the blame lay with u s treasury secretary james baker who had publicly criticised west germany for having raised its key interest rates reuter us ruled out attack on iranian silkworms u s military planners ruled out iran s silkworm missiles as a target in the retaliatory attack mounted on monday for fear of being drawn more deeply into the iran iraq war defense and middle east experts said u s naval forces destroyed an offshore oil platform and raided another in what the administration called a measured and appropriate response to an iranian silkworm missile attack last friday on a u s flagged tanker in kuwaiti waters private analysts generally agreed that going after the rig rather than an onshore economic or military target such as silkworm launch sites reflected a careful bid by washington to limit the political military and diplomatic fallout both at home and in the gulf it simply demonstrated the united states will take military action when they iran take military action norman polmar a defense analyst and author said he said hitting the platforms had spared iran the embarrassment of casualties on its own soil possibly avoiding an escalating spiral of attack and counterattack in addition it minimized the risk to u s forces and the potential embarrassment of any losses including aircraft that could have been shot down had they taken part in an attack anthony cordesman author of a new book on the iran iraq war said the united states apparently chose a limited target to keep alive the possibility that u n secretary general javier perez de cuellar might still persuade iran to accept a security council call for a ceasefire we want the u n peace initiative to work if there s any chance at all he said adding that the action made it clear tougher steps would follow if iran to attack gulf shipping in targeting an oil rig albeit one said by the pentagon to have been turned into a military command post washington also sent a message that it might be willing to attack iran s economic lifeline pentagon officials said the platform had been used as a base for iranian raids against shipping in the lower gulf we have chosen a military target but we also have shown iran that we are willing to interfere with its oil exporting capabilities cordesman said he predicted the united states would respond to any future major iranian challenges by hitting iran s naval base at bandar abbas on the straits of hormuz followed by mining the approaches to iran s oil export terminal on kharg island defense secretary caspar weinberger said on monday the united states did not seek further confrontation with iran but we will be prepared to meet any escalation of military action by iran with stronger countermeasures reuter outer continental shelf sale postponed outer continental shelf oil and gas lease sale number in the beaufort sea tentatively schedualed for january has been postponed the u s department of interior said alan powers chief of the minerals maanagement service for the department said the delay is to have more time to study the effects of drilling noise on whale migrations powers said the state has asked for additional noise data for the sale area off alaska s north slope a new date has not been set but it will likely be no sooner than next march powers said some blocks encompassing about mln acres are involved in the proposed sale the area is between three and miles off the northern coast of alaska in the artic ocean between the canadian border and degrees west longitude reuter ecuador s cepe names new head the state run ecuadorean state oil corporation cepe has named jaime sanchez valdivieso as its new general manager replacing carlos romo leroux a cepe spokesman said the spokesman told reuters sanchez is a year old civil engineer who formerly headed cepe s administration and finances division romo leroux resigned last week for personal and family reasons the spokesman said reuter ecuador posts mln dlr mth trade deficit ecuador posted a trade deficit of mln dlrs in the first eight months of compared with a surplus of mln dlrs in the same period of central bank figures show ecuador suspended oil exports which made up pct of the value of its total exports in for five months this year after an earthquake in march shattered the country s pipeline the central bank said the value of exports from january to august stood at billion dlrs and imports billion dlrs net international monetary reserves declined to mln dlrs at end september from mln dlrs at end september reuter amoco raises most crude postings cts today wti to dlrs amoco an raises crude prices amoco corp said it raised the contract price it will pay for most grades of crude oil by cts a barrel effective today the company said the increase brings its posting for west texas intermediate to dlrs a barrel west texas sour at degrees api was raised to dlrs the light louisiana sweet grade was also increased cts to dlrs a barrel amoco said wyoming southwest sweet colorado western and two utah grades of oil black wax and yellow wax were unchanged the company last changed its crude oil postings on september reuter texaco tx unit raises crude oil prices texaco inc said it raised the contract price it will pay for most grades of crude oil by cts a barrel effective october the company said the increase brings its posting for the u s benchmark grade west texas intermediate to dlrs a barrel the west texas sour and light louisiana sweet grades were also raised cts to and dlrs a barrel respectively texaco last changed its crude oil postings on september reuter brazil s sept trade surplus highest of the year brazil s september trade surplus was the best so far this year totalling billion dlrs compared with billion dlrs in august and mln dlrs in september last year banco do brasil s foreign trade department cacex director namir salek said in a news conference september exports were billion dlrs slightly down from billion dlrs in august imports in september amounted to billion dlrs against billion dlrs in august salek said the accumulated surplus in the jan sept period was billion dlrs compared with billion dlrs in a similar period coffee accounted with mln dlrs of exports up from mln dlrs in august and mln in september salek said the cacex director said he expected the country s trade surplus to average mln dlrs in the remaining three months of the year estimating the year s overall surplus to reach billion dlrs from billion dlrs worth of exports and billion dlrs of imports he attributed the good surplus on exports of manufactured and semimanufactured goods he mentioned car exports which accounted alone with sales of mln dlrs in the jan sept period against mln dlrs in a similar period reuter artillery shells said to fall on kuwait border artillery shells from an exchange of fire between iran and iraq fell on kuwait s northern border on tuesday but caused no casualties the kuwait news agency kuna said quoting a defense ministry official there were rumors in world oil markets on tuesday that iran had fired shells at an oil camp in northern kuwait in retaliation for u s attacks on iranian oil platforms in the gulf on monday several shells fell in a random manner on the northern border of the country the official told kuna it seems these shells arose from an exchange of fire between iran and iraq no one was wounded and there were no losses diplomats said shells from the nearby iran iraq warfront had in the past fallen in the northern kuwaiti desert a senior kuwait petroleum corporation official had earlier told reuters he was unaware of any attack against kuwaiti oil installations reuter u s may end additional sanctions against japan the united states may lift an additional mln dlrs in trade sanctions against japan later this month reagan administration officials said president reagan imposed mln dlrs in sanctions on japanese goods last april for its failure to honor a agreement to end dumping semiconductors in the u s and third country markets and to open its home market to u s goods the move raised tariffs to pct from about five pct on japanese color television sets hand held power tools and portable computers reagan lifted mln dlrs of the sanctions last june after japan ended selling the semiconductors on the u s market at below production costs semiconductors are the small silicon chips used for memory and recall purposes in a wide variety of computers the administration officials said commerce department monitors showed that japan was ending its dumping of the semiconductors in third countries where they had been taking sales away from american made semiconductors they said it was likely the mln dlrs in sanctions would be lifted by the end of the month the united states and japan remain at odds over opening the closed japanese markets to u s goods u s and japanese officials reviewed japan s compliance with the agreement earlier this week the periodic reviews are to continue and the remaining sanctions to stay in force the officials said until japan is in full compliance with the semiconductor agreement reuter reagan says u s committed to louvre accord president reagan said the united states remains committed to the louvre accord in which the seven major industrial nations agreed to stabilize currency exchange rates the united states remains committed to the louvre agreement reagan said in a statement following a meeting with his top economic advisers reagan said the united states japan and west germany had all reaffirmed their commitment to coordinate economic policies reagan said japanese prime minister designate noboru takeshita said in a telephone conversation tuesday morning that his takeshita s top priority was to maintain stable economic relations with the united states reagan noted that treasury secretary james baker met with west german financial officials and reaffirmed their commitment to the louvre agreement they reaffirmed our agreement to coordinate economic policies to provide for non inflationary growth and stable exchange rates reagan said reuter canada seeks five year farm reform plan canada will propose at the new round of international trade talks that most trade distorting farm subsidies be phased out over a five year period trade minister pat carney said agricultural subsidies and trade barriers have created a vicious circle which continues to cause problems of overproduction and low commodity prices carney told the house of commons carney was outlining the government s new position on the farm trade problem that was tabled on tuesday in geneva in the multilateral talks under the gatt general agreement on tariffs and trade while few details were released carney said the government would also be pressing for an improvement in market access and new measures to ensure countries do not erect artificial barriers under the canadian proposal all countries would have to ensure that domestic policies and programs to address the specific needs of their farm sectors do not distort trade a government background paper said furthermore in assessing the trade impact of programs credit could be given to countries which effectively control the output of farm products the papers said reuter miyazawa says g still strongly supports louvre accord us says canadian israeli pacts should spur trade trade representative clayton yeutter said on monday that the u s free trade agreements with canada and israel should help to pave the way for liberalizing the global trading system he said the canadian and israeli pacts will not set back worldwide reform efforts under the general agreement on tariffs and trade gatt as some critics feared but help them the gatt talks began a year ago in punta del este uruguay to liberalize the global trading system and to include in it trade in agriculture and services such as banking yeutter made his remarks at a u s israeli trade meeting marking the second year of their bilateral accord the canadian u s pact signed by two sides two weeks ago has yet been approved by the u s congress and canadian parliament the two free trade agreements fta would gradually remove tariffs and other barriers to cross border trade in goods and many services yeutter said in the aftermath of the canadian and israeli pacts other countries have realized that if they want to continue to have access to the world s largest market they had better get serious about improving the gatt the pact with israel he said is gradually increasing shipments both ways and the canadian pact will substantially increase the gross national products in both countries yeutter also said the canadian and israeli pacts should serve as important precedents for progress in gatt yeutter said increasing trade is one of the keys to enhanced political and economic stability around the globe he said a stronger gatt will enhance prosperity not only for advanced industrial nations but also for other countries that need to increase trade in order to better their standards of living yeutter added it was important not to risk the progress made in the israeli and canadian trade pacts by resorting to protectionism he was referring to trade legislation pending in congress that would force the united states to take retaliatory actions against nations with large trade surpluses with the united states if the countries practiced unfair trade the legislation was prompted by a growing u s trade deficit that hit billion dlrs last year and is still rising yeutter said the pressures for congress to act were hard to resist but the pending legislation would undermine president reagan s efforts to liberalize the world trade yeutter renewed the threat of a white house veto he said president reagan will veto any bill that contains serious flaws and i believe that veto would be sustained reuter ex arco arc chief sees energy crisis by dwindling global crude oil reserves and the lack of any major new discoveries in recent years will send the world into an energy crisis by the former atlantic richfield co chairman robert o anderson said it s going to come sooner than anyone thinks anderson told reporters after addressing a houston business lunch i believe we re going to see a change in the world oil markets in two to three years because oil is becoming harder to find anderson who retired from arco last year to form hondo oil and gas co said world oil consumption is approaching mln barrels a day but a current excess capacity cushion of about mln barrels a day will rapidly disappear if you looked around the world you could not scrape up one mln barrels a day in shut in production outside the middle east he said we re soon going to be right back where we were in and anderson predicted that world oil prices would end at about dlrs a barrel and continue a gradual climb there s no way prices can stay flat because there isn t enough supply he said there have been no major oil discoveries for the past to years alaska s prudhoe bay oil reserves the last major world discovery has already produced about five billion barrels of oil or more than half of its estimated reserves he said reuter venezuela backs increase in ecuador opec quota venezuela will back ecuador s bid to raise its opec quota above barrels per day bpd because it is a justifiable demand venezuelan energy minister arturo hernandez grisanti said on monday he told reporters the country deserved a higher quota in compensation for the five months it was forced to suspend oil production when its main pipeline was destroyed by an earthquake last march for this five month period ecuador did not exercise its right to produce bpd he said we should recognize ecuador s right to increase its quota there is a basis of justice in that country s petition he added however the quota increase should be gradual to avoid harming the market he added hernandez grisanti said he understood ecuador would formally submit the request for a higher quota at the next ministerial conference of the organization of petroleum exporting countries opec opening december in vienna reuter lawson welcomes reaffirmation of louvre accord u k chancellor of the exchequer nigel lawson welcomed on monday the reaffirmation by the u s and west germany of the louvre accord aimed at stabilising currencies his office said lawson had welcomed the outcome of a meeting between u s treasury secretary james baker bundesbank president karl otto poehl and west german finance minister gerhard stoltenberg in frankfurt after the meeting a bonn finance ministry spokesman quoted stoltenberg as saying he was confident that foreign currencies could be stabilised at around current levels the meeting came after baker criticised west germany for increasing key interest rates saying they were not in line with last february s louvre accord reuter bonn confident of maintaining currency stability u s treasury secretary james baker met west german finance minister gerhard stoltenberg and bundesbank president karl otto poehl in frankfurt on monday a bonn finance ministry spokesman said after the meeting the spokesman quoted stoltenberg as saying he was confident that foreign currencies could be stabilised at around current levels the meeting came after baker criticised west germany for increasing short term money market interest rates he had said the rise was not in line with the spirit of the louvre accord aimed at stabilizing the u s dollar last february the meeting had been arranged last week the spokesman said baker stoltenberg and poehl had agreed to pursue the policies agreed under the louvre pact with reference to currency stability and monetary policy earlier on monday the bundesbnak injected liquidity into the west german money market in a move which money market dealers interpreted as an attempt by the west german monetary authority to curb interest rate rises the spokesman described monday s talks which he called private as very positive reuter iran foreign minister tells cuba of gulf situation iranian foreign minister ali akbar velayati here on a two day official visit informed cuban foreign ministry officials on monday on the tense situation in the gulf diplomatic sources said they said the envoy s trip to be followed from tuesday by a visit to nicaragua could be linked to a possible mediation of the non aligned movement in the seven year old iran iraq war but they ruled out any prominent cuban role in it velayati could not be reached for comment on the u s attack on an abandoned iranian oil rig on monday which tehran vowed to avenge reuter unocal ucl raises crude oil posted prices unocal corp said it raised its posted prices for most u s grades of crude oil by cts a barrel effective october the move brings the price the company will pay for the u s benchmark grade west texas intermediate and west texas sour to dlrs a barrel the price was last changed september unocal said reuter delors calls for g meeting european community commission president jacques delors called for a swift convening of a meeting of the g countries following the instability in today s trading on world money and stock markets he told a press conference here g should meet discreetly and quickly delors said if the dollar were to fall further against the mark to levels around the european monetary system would undergo a test by fire delors said the current problems in the markets had been caused by excessive growth in financial trading excessive deregulation and the failure of the fundamentals of the world economy to adapt themselves quickly enough to changing circumstances he said it was profoundly unjust to blame it on recent increases in west germany reuter u s treasury s baker meets west german minister u s treasury secretary james baker met west german finance minister gerhard stoltenberg and bundesbank president karl otto poehl today in west germany and agreed to support the louvre pact the treasury department said the treasury described the meeting as a very positive private meeting in frankfurt west germany which had been agreed upon last week the parties agreed to continue economic cooperation under the louvre agreement and its flexible application including cooperation on exchange rate stability and monetary policies the treasury said the treasury said baker and stoltenberg are consulting with their g colleagues and are confident that this will enable them to foster exchange rate stability around current levels the louvre pact is an agreement between the group of seven leading industrial countries including the united states and west germany to promote currency stability baker was scheduled to visit scandinavia and belgium this week and the department earlier refused to release details of his travel itinerary citing security considerations reuter arco arc raises crude oil postings cts atlantic richfield s arco oil and gas co said it increased contract prices for crude oil by cts a barrel effective today arco said the cts increase brings its posted price for west texas intermediate the u s benchmark grade to dlrs a barrel the price of west texas sour was increased to dlrs light louisiana sweet was raised to dlrs the price was last changed on september reuter treasury s baker met west germany s stoltenberg today agreed to support louvre pact arco raises crude oil prices cts barrel today wti to german finance ministry confident of maintaining currency stability at around current levels spokesman german finance ministry confident of maintaining currency stability at around current levels spokesman u s military leader predicts iranian response william crowe chairman of the u s joint chiefs of staff predicted iran will retaliate for the u s strike against its oil platform though he said iranian options were limited they will be determined they will not be easily deterred and let me stress for you that our commitment there is not going to be risk free or casualty free he said the most likely iranian response would involve terrorism or the laying of mines they obviously will look for ways that are probably more in line with the silent hand than what they have tried thus far crowe told an american stock exchange conference he declined comment on a reporter s query whether he favored a stronger move against iran than that ordered by the president we carried out the operation that was decided upon and we carried it out with enthusiasm and i think it was professionally and well done crowe said reuter ec u s plan high level trade talks the european community is willing to offer limited concessions to the united states on one of two major issues which threaten to poison their trade relations next year an ec commission spokesman said he said the offer would be made at a meeting later this month between u s trade representative clayton yeutter and ec external relations commissioner willy de clercq ec farm commissioner frans andriessen told agriculture ministers meeting in luxembourg that the ec is willing to make some temporary arrangements to lighten the impact on u s exports of an ec plan to ban the sales of meat from animals fed with growth hormones the spokesman said washington has said it will take trade reprisals if the ec proceeds with the ban from january and if european countries do not quickly cut back what it sees as unfair subsidies to the makers of their airbus airliner which are harming u s manufacturers it claims the hormones ban has no scientific basis and will rob it of mln dlrs worth of exports a year diplomatic sources said the yeutter de clercq meeting will take place in london and will also involve the aerospace ministers of france britain west germany and spain the countries involved in the airbus project reuter statoil awards veslefrikk oil field contracts norwegian state oil company den norske stats oljeselskap statoil signed contracts worth a total of billion norwegian crowns in connection with the development of the veslefrikk oil field statoil said moss rosenberg verft of stavanger has been awarded a contract to convert the the drilling platform west vision to a floating production platform the work is to be completed in the summer of aker verdal has been awarded a contract for the engineering purchasing and construction of the steel jacket for the wellhead platform also to be completed in statoil said reuter german banker calls for special monetary meeting finance ministers from major industrial nations should hold a special meeting to deal with the u s dollar s sharp decline helmut geiger president of the west german savings bank association said geiger told reuters finance ministers should meet soon to take confidence building measures to limit the damage caused by the dollar s fall separately geiger told bild newspaper in an interview released ahead of publication on tuesday that the lower dollar which had been artificially talked down by u s officials would damage west german exports and cost jobs reuter reagan calls for vigilance on certain exports president reagan said the commerce department should be vigilant in preventing the flow of strategic technology from reaching the the soviet union and other communist countries he was speaking at the swearing in of c william verity as secretary of the commerce department verity said the u s should make certain that militarily sensitive high technology does not wind up in communist nations but he also said the u s must reduce the list of products of a nontechnological nature thereby allowing manufacturers to increase exports and jobs reuter venezuela says opec oil output ver mln bpd caracas oct the current opec oil production is above mln barrels per day bpd and this level threatens the precarious equilibrium of the of oil market venezuelan energy and mines minister arturo hernandez grisanti said on monday he told reporters three or four countries out of opec s members were mainly responsible for the overproduction but declined to identify them opec s production ceiling for the second half of is mln bpd the venezuelan minister said opec s production reached a peak this year when it went over mln bpd in august hernandez grisanti together with the oil ministers of nigeria and indonesia met the heads of state of six mideast gulf countries earlier this month to urge opec members to comply with assigned production quotas he said some of the countries which were complying as venezuela indonesia libya algeria ecuador saudi arabia and iran hernandez declined to say whether the three or four countries he said were overproducing bordered the mideast gulf reuter southland slc unit raises crude oil prices citgo petroleum corp a subsidiary of southland corp said it raised the contract price it will pay for all grades of crude oil by cts a barrel effective oct the increase brings citgo s postings for the west texas intermediate and west texas sour grades to dlrs barrel while light louisiana sweet is now priced at dlrs citgo last changed it crude oil postings on sept reuter venezuela sees oil stability despite gulf attack venezuelan energy minister arturo hernandez grisanti said he foresaw market stability in the price of crude despite growing tension in the gulf augmented by the u s military attack on an iranian oil platform he told a news conference the market continues to be stable despite all the military action in the gulf reuter balladur urges g to respect louvre accord french finance minister edouard balladur said the group of seven g industrial countries should respect pledges on monetary policy made in the february louvre accord on currency stability we have to strengthen the cooperation between the seven major industrial countries and remind ourselves of the pledges we made at the louvre he told journalists they were not simply pledges to maintain currency stability but also to conduct a certain type of economic and monetary policy he added reuter fed s johnson says louvre accord still vital federal reserve board vice chairman manuel johnson said the louvre accord is still healthy but said the united states and west germany must work out differences over their respective roles in fulfilling the accord the louvre accord has worked very well in terms of stabilizing exchange rates he said in response to a question during an american stock exchange conference here he said exchange rates have been stable so far in as a result of the accord reuter ample supplies limit u s strike s oil price impact ample supplies of opec crude weighing on world markets helped limit and then reverse oil price gains that followed the u s strike on an iranian oil platform in the gulf earlier on monday analysts said december loading rose to dlrs up cents before falling to around later unchanged from last friday fundamentals are awful said philip lambert analyst with stockbrokers kleinwort grieveson adding that total opec production in the first week of october could be above mln bpd little changed from september levels peter nicol analyst at chase manhattan bank said opec production could be about mln in october reuter and international energy agency iea estimates put opec september production at mln bpd the u s attack was in retaliation of last friday s hit of a kuwaiti oil products tanker flying the u s flag the sea isle city it was struck by a missile believed to be iranian in kuwaiti waters and was the first hit on a u s flag commercial vessel in the seven year iran iraq war the u s owned liberian flag tanker sungari was hit in the area on thursday also believed struck by an iranian missile refiners were not significant purchasers of physical oil on monday as a result increased gulf tension following the u s attack analysts said they said a closure of the strait of hormuz through which around eight mln bpd passes isnlikely because it is not in the interests of the u s or iran they said any threat to oil supplies would stem from an increase in the number of tanker attacks as part of a widening of gulf hostilities analysts said but they saw the u s strike as a limited reply to iranian missile attacks with some describing it as responsible geoffrey pyne analyst at stockbrokers phillips and drew said he was impressed by the sensible u s response the u s has thought carefully about what would correspond to iranian agression they have proved to the iranians that any further action will be met with a like for like response today s action by the u s was not escalatory pyne said kleinwort grieveson s lambert said the u s strike was a responsible retaliation with the u s apparently indicating to iran that it could increase the severity of its attacksf iran chose to raise the level of conflict chase manhattan s nicol took a different view however he said he was unable to see what the u s had achieved as arab states such as kuwait and saudi arabia whose interests the u s is supposedly defending will feel less secure as a result of the u s attack and fear some sort of iranian retaliation the initial upward market move this morning reflected a strong speculative reaction to rumours of a u s attack which was thought at one stage to have been against iranian missile launchers on the faw peninsula close to kuwait analysts said the later downtrend followed confirmation of a u s navy attack on an iranian oil platform by the u s defence secretary caspar weinburger market operators were able to evaluate the situation in the gulf on the basis of confirmed fact and finding it less serious than first thought took profits taking prices lower analysts and traders said reuter balladur urges g to respect louvre accord french finance minister edouard balladur said the group of seven g industrial countries should respect pledges on monetary policy made in the february louvre accord on currency stability we have to strengthen the cooperation between the seven major industrial countries and remind ourselves of the pledges we made at the louvre he told journalists they were not simply pledges to maintain currency stability but also to conduct a certain type of economic and monetary policy he added balladur s comments came after u s treasury secretary james baker said on sunday that the u s would have to re examine the louvre accords in the light of the rise in west german short term interest rates balladur was one of the main architects of the louvre accord and has invested considerable political capital in defending them reuter fed s johnson says louvre accord alive but cites u s german differences balladur urges g to respect pledges on monetary policy in louvre accord u s house speaker denies trade bill hurt stocks house speaker jim wright dismissed charges that the trade bill before congress contributed to the fall in stock prices on wall street that is utterly ridiculous the texas democrat told reporters treasury secretary james baker and other administration officials over the weekend pointed to the pending legislation which they brand too protectionist as a key factor in the record setting drop reuter security council calls talks after gulf attack the u n security council was called to a private meeting on monday for consultations following the united states attack on an iranian oil platform meanwhile a u n spokesman said that as far as he knew a report to the council and secretary general javier perez de cuellar on the action had not been received from the americans in washington president reagan said the united nations was being informed of the attack under the provision of the u n charter regarding notification of actions taken under the right of self defense the u n spokesman francois giuliani said perez de cuellar had no comment on the attack taken in response to iranian action against an american owned tanker last week but was trying to find out what actually happened calls to iran s u n commission elicited no response reuter g seen fighting to keep currency pact international monetary officials will rush to paper over the deep cracks that have appeared in the louvre accord on currency stability to prevent a dollar free fall and to calm turmoil in world capital markets economists and currency traders said i don t think the louvre is dead because if it breaks up in an acrimonious way the potential outcome is a rout of the dollar higher interest rates and collapsing stock markets it s in the group of seven s interest to calm things down said douglas madison corporate trader at bankamerica corp in a weekend television interview u s treasury secretary james baker sharply criticised a recent rise in west german money market rates and said the eight month old louvre pact to foster exchange rate stability needs to be reviewed his comments rocked the currency markets and helped send the already fragile u s and overseas stock markets into a tailspin the dollar lost more than two pfennigs in the u s to about marks and about one yen to yen the dow jones industrial average slumped more than points at one stage and u s treasury bonds dropped about points reuter usx x unit hikes crude oil posted prices marathon petroleum company a subsidiary of usx corp said it lowered posted prices for crude oil by cts with an effective date of october the increase brings posted prices for west texas intermediate and west texas sour to dlrs a barrel each south louisiana sweet was increased to dlrs a barrel several indepndent oil companies such as permian corp and coastal corp cgp said they had moved prices up effective last friday the day sun co sun announced a cts a barrel increase to dlrs a barrel reuter marathon raised crude posted prices by cts a barrel effective october transatlantic row imperils louvre accord dealers the louvre accord on currency stability which has maintained an uneasy calm in currency markets since last february appeared in serious danger today as a transatlantic dispute over west german interest rates came to the boil foreign exchange dealers said but as the dollar slid against the mark and world stock and bond markets plunged officials in the major industrial countries played down the dispute as a bilateral problem between the united states and west germany and insisted that the currency pact was still alive u s treasury secretary james baker sparked the market fears when he attacked the rise in west german short term interest rates that s not in keeping with the spirit of what we agreed to as recently as earlier this month in washington baker said in a u s television interview on sunday he was referring to the meetings of finance ministers from the group of seven g leading industrial nations which reaffirmed the pact under the louvre accord west germany and japan who both have large trade surpluses pledged to boost their economic growth to take in more exports from the u s while the u s agreed to stop talking the dollar down however baker said on saturday that while the louvre agreement was still operative the west german interest rate move would force the u s to re examine the accord the foreign exchange market has been told by baker that he s going to hammer germany he has just declared all bets are off in terms of currency cooperation chris johns currency analyst at ubs phillips and drew in london said but a bank of japan official took a much more sanguine view telling reuters that the exchange market is apparently reacting too much and anyone who sold the dollar on the baker comment will regret it later on french finance minister edouard balladur who hosted the louvre meeting was the only one of the g finance ministers to respond directly to baker s remarks he called for a faithful and firm adherence by all the major industrial countries to the louvre accords in both their letter and spirit neither the west german finance ministry nor the british treasury commented on the row but a japanese finance ministry official said that despite u s frustration over higher interest rates abroad this does not represent its readiness to scrap the basic framework of the louvre accord in frankfurt f wilhelm christians joint chief executive of west germany s largest bank deutsche bank said that following recent meetings with baker he believed that the u s was still committed to the accord in a move which the market interpreted as a possible gesture of reconciliation the bundesbank added short term liquidity to the west german money market at pct on monday down from the pct level at which it injected medium term liquidity last week the bank of france also stepped into the french money market to hold down rates injecting short term liquidity at pct after rates rose close to eight pct reuter stoltenberg assumes cooperation will continue the west german government assumes that the commitment to international monetary cooperation which was renewed in washington last month will continue a finance ministry spokesman quoted finance minister gerhard stoltenberg as saying stoltenberg s statement was a reaction to criticism of rises in west german interest rates voiced by u s treasury secretary james baker over the weekend reuter stoltenberg says he assumes monetary cooperation will continue west germany still committed to louvre accord west german government sources said bonn remained committed to the louvre accord to stabilise currencies which was struck by leading western democracies in paris last february over the weekend u s treasury secretary james baker criticised recent rises in west german short term interest rates and said such developments were not in the spirit of the louvre pact he said the agreement may have to be re examined the sources said the west german interest rate rises had to be seen in the context of interest rate developments worldwide reuter fed seen adding reserves via system repos the federal reserve is expected to enter the government securities market to supply reserves to the banking system via system repurchase agreements economists said most economists said the fed would execute three day system repurchases to meet a substantial need to add reserves in the current maintenance period although some said a more aggressive add via overnight system repos was possible federal funds opened at pct and remained at that level late this morning compared with an average effective rate of pct friday reuter coastal cgp raises oil posted prices coastal corp said that effective october it had raised posted prices for crude oil by cts a barrel the increase brings west texas intermediate to dlrs a barrel and west texas sour to dlrs a barrel sun co sun announced that it would make a cts a barrel increase late friday bringing wti to dlrs a barrel and traders said that other oil companies could be expected to increase prices reuter tass denounces u s attack on iran as adventurism the official soviet news agency tass denounced a u s attack on an iranian oil drilling platform in the gulf on monday as military adventurism and said it would bring no dividends to the reagan administration tass commentator mikhail krutikhin said the administration had embarked on an adventurist path in order to deflect attention from the scandal in which the united states sold arms to iran and the profits were diverted to nicaraguan rebels the confrontation is a fact now what is obvious is that the latest military adventure will not bring political dividends to the american administration krutikhin said soviet leader mikhail gorbachev and foreign minister eduard shevardnadze abruptly left a parliamentary session earlier on monday sparking diplomatic speculation that they were concerned with an urgent matter of foreign affairs soviet officials have previously criticized the united states for sending naval forces into the gulf saying their presence serves to increase tension moscow is officially neutral in the war between iran and iraq it is a major arms supplier to iraq but has also sought broader contacts with iran in the last year krutikhin said the united states has undertaken an act of armed aggression against iran the probability of which has long been spoken of by washington officials reuter coastal said raised oil postings cts a barrel october wti now dlrs cairns group said influential in trade talks australian minister for trade negotiations michael duffy said his country and third world commodity producers have formed an effective lobby group against farm export subsidies and market access restrictions duffy told a press conference the cairns group of major agricultural producers to which australia and thailand belong has emerged as an important third force in any multilateral trade talks there s no doubt that the cairns group is being seen as a third force to be reckoned with both inside the general agreement on tariffs and trade and in other international trade negotiations he said duffy here on a three day visit after talks in the united states the european community ec and latin america said considerable progress has been made by the group towards fighting costly protectionist policies pursued by developed countries the minister said the ec commission s new farm trade paper will recognise the heavy financial burdens imposed by its common agricultural policy and its future expansion he said the reagan administration has also displayed a determination to resist the currently strong protectionist sentiment in the u s congress reuter weinberger says u s forces attacked iranian oil platform deutsche bank chief says louvre pact still intact deutsche bank ag joint chief executive friedrich wilhelm christians said he believed the louvre accord on currency stability was still intact christians told a news conference he met u s treasury secretary james baker in the last two weeks after short term german interest rates had risen twice i am sure that with marks the dollar is still within the louvre agreement i do not see that the accord has been terminated christians said he was responding to questions about comments by baker who said the louvre accord was still operative but criticised rises in west german interest rates reuter shipping sources say unidentified jets raid iranian oil platforms in southern gulf south yemen plans oil export pipeline mees south yemen is planning a major oil pipeline system to be completed in months time to start exports at a initial rate of barrels per day bpd the middle east economic survey mees said mees said government approval for the export pipeline followed a visit to aden by a high ranking delegation from the soviet union which will help south yemen construct the line the engineering studies for the pipeline are nearly finished and construction is expected to start early next year the industry newsletter said the pipeline will run about kms miles from shabwa oilfields to a coastal terminal at bir ali on the gulf of aden mees said mees said the soviet firm technoexport which is developing oilfileds for south yemen has substantially increased its initial reserve estimates and recommended a pipeline with an eventual bpd capacity the discovery of commercial quaotities of oil was confirmed by technoexport earlier this year in three structures in the shabwa region in the northwestern part of the country kms east of north yemen s alif oilfield reuter balladur insists on maintenance of louvre accords french finance minister edouard balladur issued a firm call for the continued faithful application of the louvre accords on currency stability by all major industrial countries balladur responding to weekend remarks by u s treasury secretary james baker that the u s would take another look at the accords said i firmly desire a faithfull and firm adherence by all the major industrial countries to the louvre accords in both their letter and spirit on sunday baker said last week s rise in short term west german interest rates was not in keeping with the accords the louvre accords agreed in paris last february called for stability among the major currencies after a prolonged dollar slide the accords were reaffirmed by the group of seven finance ministers in washington last month but baker said at the weekend that the west german rate rise was not in keeping with the spirit of what we agreed to what i m really saying is that they should not expect us to simply sit back here and accept increased tightening on their part on the assumption that somehow we are going to follow them he added reuter bonn ministry has no comment on baker remarks the west german finance ministry declined to comment on weekend criticism by u s treasury secretary james baker of recent west german interest rate increases baker said the u s would re examine the february louvre accord to stabilise currencies reached by leading industrial democracies the rise in west germany short term interest rates was not in the spirit of an agreement by these nations in washington which reaffirmed the louvre pact he said a finance ministry spokesman asked for an official ministry reaction to baker s remarks said he could make no comment reuter banks extend trading halt in lebanese pound lebanon s bankers association said it extended its suspension of trading in the lebanese pound for two more working days to study ways to stem the currency s collapse the central bank did not post the rate of the pound to the dollar and other currencies on monday the pound closed on thursday at to the dollar compared with wednesday s close of association sources told reuters friday s suspension of trading for two working days was continued on monday for two more days so as to study proposals to reinforce the pound the association which comprises commercial banks in east and west beirut halted trading on friday in a chaotic market after the pound crashed to four record lows in the week the pound hit by the inability of lebanon s religiously and ideologically divided government to end years of civil war has lost more than pct of its international value this year reuter statoil places north sea veslefrikk field orders den norske stats oljeselskap a s statoil stat ol operator on norway s north sea veslefrikk oil field has placed field development contracts totalling billion crowns with two domestic yards the company said in a statement moss rosenberg verft a subsidiary of kvaerner industrier a s kvio ol won a billion crown contract to convert statoil s semisubmersible rig west vision to a floating production platform and to build the deck for a separate fixed well head platform to be placed on the field it said statoil said aker verdal a unit of aker norcem a s amvo ol won a mln crown contract to design and build the well head platform s tonne steel substructure to stand in metres of water next to the converted rig statoil said using a floating production unit rather than a fixed platform would cut construction time enabling field partners to bring veslefrikk on stream in late several months earlier than previously planned veslefrikk with estimated recoverable reserves of mln barrels oil and billion cubic feet gas is located km west of bergen statoil estimates the field s total development cost including drilling at billion crowns planned daily output is barrels oil and mln cubic feet gas veslefrikk s oil will be landed via the nearby oseberg field pipeline at the sture crude terminal near bergen its gas will be fed into the statpipe line which gathers gas from norway s statfjord gullfaks and oseberg fields partners on the field are statoil the operator with a pct share unocal norge a s pct deminex norge a s pct norsk hydro a s nhy ol nine pct and svenska petroleum ab pct reuter balladur insists on maintenance of louvre accords french finance minister edouard balladur issued a firm call for the continued faithful application of the louvre accords on currency stability by all major industrial countries balladur responding to weekend remarks by u s treasury secretary james baker that the u s would take another look at the accords said i firmly desire a faithfull and firm adherence by all the major industrial countries to the louvre accords in both their letter and spirit on sunday baker said last week s rise in short term west german interest rates was not in keeping with the accords the louvre accords agreed in paris last february called for stability among the major currencies after a prolonged dollar slide the accords were reaffirmed by the group of seven finance ministers in washington last month but baker said at the weekend that the west german rate rise was not in keeping with the spirit of what we agreed to what i m really saying is that they should not expect us to simply sit back here and accept increased tightening on their part on the assumption that somehow we are going to follow them he added reuter philippine trade gap widens in january august the philippines trade deficit widened to mln dlrs in the eight months to end august from mln dlrs in the same period the national statistics office said it said exports in the eight month period rose to billion dlrs from billion in while imports rose to billion dlrs from billion a year earlier the country s trade deficit totalled mln dlrs in reuter iran soviet union to swap crude refined products the soviet union has agreed to supply iran with refined oil products in exchange for barrels per day of crude iran s national news agency irna said irna monitored in nicosia quoted oil minister gholamreza aqazadeh as saying on his return to tehran from moscow that the agreement was part of a protocol on economic cooperation signed during his visit the amount of crude delivered to the soviet union might double to bpd later he said aqazadeh said the two sides agreed to conduct feasibility studies for a pipeline to take iranian crude from fields in southern iran to the black sea through the soviet union iran is pursuing the pipeline project to protect part of its oil exports from iraqi air attacks in the gulf irna made no mention of natural gas exports to the soviet union which aqazadeh had said would be discussed before he left for moscow iran lost most of its refining capacity early in the gulf war and now imports several hundred thousand bpd of refined products aqazadeh said soviet refined products would be delivered at the caspian sea ports of anzali and nowshahr at neka near the caspian and at jolfa in north west iran reuter