Strictly: Drilling and oil-field services Message Board

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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: Lucretius who wrote (17236)	3/30/1998 7:36:00 PM
From: Tulvio Durand	of 95453

LT, Teddy, spot oil can go to zero if there's no place to store the excess oil. But there will be none sold at that or any other price if there's no facility available to store it. So spot oil price and OPEC quotas will become meaningless until the glut is worked off. And since 2.0 million bl/day cut was needed to cure the glut, 1.52 million bl/day cut is too little and isn't going to cure the problem. So we will automatically get whatever production cut is needed that barely meets available storage. Balance will be restored eventually, but not anytime soon, I'm afraid. Tulvio

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