Venezuela's President Chavez Sends Troops to Colombian Border
Ecuador's President Rafael Correa
Mr. Chavez said Sunday Colombia's incursion into Ecuador has pushed South America to the brink of war. Mr. Chavez ordered the closing of Venezuela's embassy in Bogota and the withdrawal of all its personnel.
Ecuador recalled its ambassador from Bogota, leaving its trade representative in charge of the embassy.
Colombia said it was acting in its own defense Saturday when it attacked a jungle camp in Ecuador and killed Raul Reyes, a spokesman and leader of the Revolutionary Armed Forces of Colombia, or FARC.
The death of the 59-year-old Reyes is seen as a victory for Colombia's President Alvaro Uribe, who has been under increasing international pressure to ease Colombia's long-running conflict with the FARC.
The Colombian government has been negotiating the swap of jailed rebels for FARC-held hostages. Four hostages were released to Venezuelan authorities on Wednesday.
The leftist rebel group is believed to be holding about 750 hostages in jungle hideouts.
BOGOTA - Crude oil fell after Venezuela recalled troops from its Colombian border, allaying concerns of a regional conflict, and Mexico opened oil ports shut by storms.
Venezuela, the fifth-biggest supplier in the Organization of Petroleum Exporting Countries, had dispatched 10 armored battalions on March 2 after Colombia struck a guerilla leader based in Ecuador. Petroleos Mexicanos, the state-owned oil company, reopened terminals in the Gulf of Mexico after closing them on March 7 because of heavy rain and winds.
``We're seeing the fall out between Ecuador, Venezuela and Colombia healed as a temporary truce emerges, while it's also likely shipments from Mexico will resume later today,'' said Rob Laughlin, senior broker at MF Global Ltd. in London. ``This is happening against the bigger picture of the ailing U.S. economy, where recession fears continue to mount.''
Crude oil for April delivery fell as much as 79 cents, or 0.8 percent, to $104.36 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $104.42 a barrel at 11:39 a.m. London time.
On March 7, the contract rose to a record $106.54 a barrel before settling at $105.15 a barrel. Prices have gained 74 percent in the past year.
The border tensions, which led Venezuela and Ecuador to break diplomatic relations with Colombia, raised concerns of a regional war among the three oil-exporting countries. That helped push oil prices to a record $106.54 a barrel March 7.
Brent crude oil for April settlement fell as much as 85 cents, or 0.9 percent, to $101.53 a barrel on London's ICE Futures Europe exchange. The contract traded $101.65 at 11:40 a.m. in London. The contract fell on March 7 by 23 cents to close at $102.38 after earlier reaching a record $103.98 a barrel.
Petroleos Mexicanos, called Pemex, reopened terminals at the ports of Dos Bocas, Cayo Arcas and Pajaritos, according to the Web site of Mexico's Merchant Marine. The three terminals ship about 80 percent of the oil Mexico exports.
Pemex closed its terminals several times in January because of stormy weather. Exports fell 4.1 percent to 1.434 million barrels a day in January from a month earlier.
A Labor Department report on March 7 report showed the U.S. shed jobs last month, signaling demand may slow in the world's biggest energy-consuming country. The U.S. unexpectedly lost 63,000 jobs in February, the biggest drop since March 2003.
``The jobless report wasn't favorable,'' said David Aleman, a senior trader at Grand Central Trading Co. in Newport Beach, California. ``We're in uncharted territory and we are trading cautiously given there's a glut of oil.''
The Organization of Petroleum Exporting Countries, supplier of more than 40 percent of the world's oil, decided at a meeting last week to keep production targets unchanged, disregarding calls from U.S. President George W. Bush to provide extra crude.
``Prices are expected to remain high until the end of the year,'' OPEC President and Algerian Oil Minister Chakib Khelil said in Algiers yesterday. ``Prices are high because of economic and geopolitical reasons.''
Venezuela 'sends tanks to border'
Mr Chavez has been mediating hostage releases with the rebels
Venezuelan President Hugo Chavez is sending thousands of troops and tanks to the border with Colombia, marking a sharp escalation in regional tensions.
Speaking on his weekly television show, President Chavez also said Venezuela's embassy in Colombia would close.
Mr Chavez said he was reacting to the "cowardly murder" of a leading Farc rebel by Colombian forces in a raid just inside Ecuador on Saturday.
Later, Ecuador recalled its ambassador to Bogota in protest at the incursion.
Raul Reyes and at least 16 other rebels were killed in the operation, which took place about 1.8km (one mile) inside Ecuadorean territory.
Mr Chavez has been mediating with the Revolutionary Armed Forces of Colombia - or Farc - to secure the release of hostages the rebels hold, and six have so far been freed under this initiative.
But he lamented the killing of Reyes - whom he called a "good revolutionary" - when he spoke on his show, "Alo, Presidente".
Colombia's defence minister had described the death of Reyes as the "biggest blow so far" to Farc.
But Mr Chavez described the strike as "a cowardly murder, all of it coldly calculated".
He said Colombia "invaded Ecuador, flagrantly violated Ecuador's sovereignty".
Mr Chavez addressed his defence minister, asking him to "move 10 battalions to the border with Colombia for me, immediately" - a deployment likely to involve several thousand soldiers.
"The air force should mobilise. We do not want war. But we are not going to let them... come and divide and weaken us."
He ordered the Venezuelan embassy in Bogota closed and said all embassy personnel would be withdrawn.
Mr Chavez had earlier warned Bogota that any incursion into Venezuelan territory similar to Saturday's operation would be a "cause for war".
Later, Ecuador announced that it too was taking punitive measures against what it terms an illegal incursion, and had recalled its envoy to Colombia.
But this is not a full severance of ties, as commercial relations will remain intact, said officials at the country's foreign ministry.
In his address, Mr Chavez said Ecuador's President Rafael Correa had also agreed to send troops to the border, Associated Press news agency reported.
President Correa has complained to the Colombian government about its incursion, calling it "scandalous", and a formal protest has been lodged with Bogota.
Colombia's government has received billions of dollars in aid from Washington to fight the guerrillas - as the US, along with the EU, views Farc as a terrorist organisation.
Colombian troops have recently retaken control of areas previously held by rebel groups, but Farc retains a strong hold over Colombia's more remote regions.