CARACAS (Reuters) - OPEC member Venezuela lifted a
"yellow alert" in its oil sector Wednesday after restoring
diplomatic ties with neighboring Colombia.

President Hugo Chavez's government announced the alert last
month when it broke relations with Bogota, saying Colombia's
accusations that Venezuela shelters leftist rebels could be a
precursor for a U.S.-backed attack on its soil.

Chavez met new Colombian President Juan Manuel Santos this
week to reestablish full relations, blaming the diplomatic
dispute on outgoing leader Alvaro Uribe.

"We are ordering the lifting of the yellow alert," Oil
Minister Rafael Ramirez said in a statement. Under the alert,
workers and their families were to prepare for possible war.

"We are very happy with Commander Chavez's firm decision in
respect of our sovereignty, the defense of national interests
and the integrationist vision of the nations which
(independence hero) Simon Bolivar liberated," Ramirez said.

Though Bogota's accusation that Venezuela had allowed
hundreds of Colombian rebels onto its soil have not gone away,
the two presidents opted to put pragmatism and mutual trade
interests above politics.

Markets largely shrugged off the dispute, seeing it as more
political theater than genuine threat of war.
(Reporting by Andrew Cawthorne)