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: Amelia Carhartt who wrote (25074)	7/2/1998 8:59:00 AM
From: diana g	Read Replies (1) of 95453

FOCUS-Oil prices edge up, market waits for news LONDON, July 2 (Reuters) - World oil prices edged higher on Thursday as players looked for direction amid hopes OPEC's decision to cut output would soon siphon surplus crude from the oversupplied market. Traders said prices were bolstered overnight by concerns about renewed tension in the Middle East and a possible strike by Venezuelan oil workers from Monday. Benchmark Brent blend was trading 18 cents higher at $13.60 at 1127 gmt. While Brent has risen from recent lows, it is still around six dollars a barrel lower than last year's average price. Traders added the market was apathetic ahead of the long Independence Day holiday weekend in the United States with New York markets shut on Friday. In London, the International Petroleum Exchange will close early on Friday. ''The market's placid, pre-holiday and post World Cup. I see very little motivation for direction,'' said Peter Gignoux, head of the energy desk at Salomon Smith Barney. Activity is likely to be limited with speculators covering their positions ahead of the weekend. Players were keeping a watchful eye on the Middle East after Iraqi press stepped up criticism on Thursday of a U.S. missile attack on Tuesday against an Iraqi radar site. The Babel daily, owned by President Saddam Hussein's eldest son Uday, said the incident was a ''deliberate attack which aims at mnaufacturing tension.'' U.S. officials said an F-16 warplane fired at an air defence missile battery after Iraqi radar locked onto an accompanying British fighter patrolling a no-fly zone in southern Iraq. The other factor helping support prices was news Venezuelan oil sector workers planned to go on strike from Monday if there was no settlement of a pay dispute involving petrochemical workers at state oil company Petroleos de Venezuela (PDVSA). Oil workers last staged a strike in November. It lasted just 12 hours and involved between 30 percent and 40 percent of PDVSA staff. Longer term the big issue concentrating traders' minds was when OPEC's decision to cut output by 1.355 million barrels a day would start to push prices higher. Massive stock levels in the United States and Europe has meant a turnaround in prices has been much slower than many OPEC members had been hoping. Most analysts say the impact of the cuts, effective July 1, will only be be felt in the fourth quarter of the year. OPEC members Nigeria and Iran and non-OPEC Oman confirmed their cuts on Wednesday, notifying buyers of a curb in exports in line with the pact.

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