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: diana g who wrote (27765)	8/14/1998 3:28:00 PM
From: diana g	Read Replies (1) of 95453

FOCUS-Oil prices pressured as Saudi impact wanes LONDON, Aug 14 (Reuters) - Oil prices drifted around unchanged on Friday as dealers sought in vain for evidence that other producers would follow Saudi Arabia's lead and make big cuts in exports. Benchmark Brent crude on the London futures market was trading at Thursday's settlement of $12.09 a barrel at 1440 GMT after slumping to a session low of $11.93. Dealers said a rally on Thursday triggered by news of bold Saudi export reductions in September now looked slightly overdone and market sentiment was hesitant. They said they saw no evidence that other members of the Organisation of the Petroleum Exporting Countries would copy Saudi Arabia's price-support gambit. Reminders by fellow major producers Norway and Venezuela that they were concerned about sagging price levels helped stem losses but were not enough to push prices into positive territory. Norway's energy ministry said that it could not rule out a new round of cuts in oil output in order to raise prices. The non-OPEC producer has ordered cuts in output by 100,000 barrel per day (bpd) since May as part of joint OPEC and non-member efforts to shave world output and prop up prices. For its part, OPEC heavyweight Venezuela said it had suggested a meeting with other oil producers to discuss flagging prices. But it added it believed it was still to early for the markets to have felt the full effect of recent oil output cuts. Minister of Energy and Mines Erwin Arrieta said he was in permanent telephone contact with his counterparts, and had proposed the meeting before OPEC's scheduled November talks. ''I've suggested another meeting with the other Ministers that have met before. This time it won't be a secret meeting. The when, the how and the where will be told in advance,'' Arrieta said. Arrieta said it would be ''an open door meeting. We have to give order to the oil markets.'' Saudi Arabia's move to slash September contractual exports by 18 percent has underpinned a faltering attack by OPEC on a glut that has submerged markets in excess crude and products. Stocks are bulging and demand growth has slumped due to economic crisis in Asia, until last year the oil-hungry engine room of global energy market expansion. Oil markets remain divided on whether Saudi is making a unilateral bid to provide extra support or simply catching up on its full pledge to slice 725,000 bpd from February levels. Saudi Arabia had pledged to reduce output as the biggest contributor in an OPEC package of cuts totalling 2.6 million bpd coordinated with additional cuts by non-OPEC members like Mexico. Traders have expressed scepticism over the cuts by the notoriously argumentative cartel and a Reuters survey pegged compliance to the end of July at only around 63 per cent. But Saudi Arabia signalled earlier this month that if OPEC showed good compliance in September and prices did not rise markedly in response then it would consider making a third round of cuts before OPEC's November conference.

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