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Gold/Mining/Energy : Canadian Oil & Gas Companies

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To: CIMA who wrote (4209)	11/27/1997 4:56:00 AM
From: Kerm Yerman	Read Replies (1) of 24910

CIMA / Iraq Conflict A short answer to your question. Price of crude would go up. I've been searching for a 10-year chart on the net to illustrate the effect Desert Storm had on oil prices. Couldn't find one. So, off the top of my head - here is some detail. First, lets establish the timing. It was in December 1990 that Kuwait was invaded. Sadam was given til Jan 15th to pull out. Shortly thereafter, UN forces went in. The price of WTI crude oil was around $18.00 bbl mid 1990 before the crisis began to effect the price. It peaked at around $37.00 about the time Kuwait was invaded. The price fell as fast as it had gone up and settled in the normal trading range right after the conflict came to an end. Keep in mind it was a very short conflict. To conclude, the increase in the price of crude took place prior to the invasion of Kuwait and actually began to decline prior to this event. Before the end of January, the price of oil had retraced all it had gained in the prvious six months. If you were to overlook the spike in price for this period, a long term chart should reflect a trading range of $14 - $25 for crude over the last 10 years. That's a wide spread and rather misleading. For the majority of the past 10 years, the price has fluctuated between $18 - $23. In fact, come mid-January, I would estimate the price of crude may be within a few pennies of the price of 10 years ago. This same price might also be a few pennies from the average price forthe whole of the period. I'm basing these comments on disregarding the large spike that took place in 1990 due to the Iraq situation. See if you can find a 10 year chart for oil prices. If anyone reading this does, please list the location to reference. Again, I have spun off price history from my memory and such should be confirmed with an actual chart.

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