GULF WATCH: Day 57 : A Daily Briefing Paper On Developments In The Crisis

Diplomatic Front:

Baghdad denied threatening Western diplomats who hide foreigners in their embassies, calling it “just a misunderstanding.” The acting U.S. ambassador wore a clothesline noose to show his disdain for the Iraqi note sent to embassies. Iraq also said that foreign nationals will be denied food ration cards.

At the United Nations, the deposed emir of Kuwait described his homeland as the victim of “naked, brutal aggression.” The Iraqi delegation stalked out. Military Front:

A U.S. Navy frigate fired shots across the bow of an Iraqi tanker in the Red Sea. The tanker halted, was searched and released. It was fourth such incident in crisis. Economic Front:

Stock prices fell sharply as oil prices briefly broke the $40-a-barrel mark before inching downward. Meanwhile, the World Bank expressed concern that the turmoil throughout the Mideast could result in global recession. Crisis Indicators:

Energy prices:

Wholesale crude oil, $39.54 per barrel, up 0.87

Wholesale gasoline, $1.0269 per gallon, up 0.0259

Heating oil, $1.0437 per gallon, up 0.018