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: BigBull who wrote (47535)	7/8/1999 7:55:00 AM
From: diana g	Read Replies (1) of 95453

Oil Prices Soar; U.S. Demand Accelerates [better + better --d] dailynews.yahoo.com LONDON (Reuters) - Steamy world oil markets soared to a 19-month high Thursday after weekly data signaled accelerating petroleum demand in the United States, the world's biggest oil consumer. London futures for benchmark Brent blend crude climbed in early trade to a new peak of $18.61, up 46 cents. Dealers attributed the gains to Wednesday's inventory statistics from the American Petroleum Institute showing a large draw in U.S. gasoline stocks in the week to July 2 and a fall lower crude stocks. ''U.S. oil demand is apparently growing much faster than expected,'' said Peter Gignoux head of the London energy desk at Salomon Smith Barney. ''It's another week in which the inventory statistics have shown a stockdraw and taken prices to new highs.'' The data implied U.S. summer gasoline demand had risen to 9.25 million barrels in the week from 8.8 million of implied demand in the previous week. U.S. crude stocks fell for the third consecutive week and, at 328 million barrels, now show a 13 million barrel deficit versus the high levels of the same time last year. Oil prices have jumped $2.50 in just over two weeks, the latest leg in a rally which has carried Brent up from sub-$10 lows in February. Prices have moved quickly into the $18-$20 a barrel range targeted by OPEC exporters who in March this year agreed stringent supply limits. Dealers said the bullish mood on oil markets was underpinned by OPEC's determined effort to erase surplus petroleum stockpiles. Recent surveys have estimated OPEC adherence with the output curbs at just short of 90 percent. Algeria's OPEC President Youssef Yousfi Wednesday said the cartel would not consider easing the limits until they are due to expire at the end of March next year. He ruled out any increase in OPEC oil output quotas before March 2000 saying there was a consensus in the cartel to stick by export limits despite rising prices. But analysts have said they expect surplus stockpiles to be erased by the end of September, leaving the market exposed to higher prices during the peak northern hemisphere winter demand season. ''By avoiding a significant second quarter build this year OPEC has done a great deal to meet its objective of eliminating excess inventories on world markets,'' said Washington consultancy Petroleum Finance. ''If the third quarter draw is as large as expected, the inventory surplus will be eliminated before demand peaks in the fourth quarter.''

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