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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: marc chatman who wrote (30906)10/19/1998 10:37:00 PM
From: diana g  Read Replies (1) of 95453
 
Re: Cape Town Conference --- Thanks, marc! I looked and looked for that. I was beginning to think I had dreamed it!
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Re: Venezuelan Statement --
As mentioned a while back, sometimes these guys say odd things --- or what seem at first glance to be odd things. It seems counterproductive for Venezuela to announce 8+ months in advance that they're going to (maybe) open the taps, driving down the price.

Why do that?
Maybe to use the fear of low future oil prices to keep other (non cooperating) producers off balance, discourage development of competing wells, and thus maintain market share?

I think it is a good strategy for the big producers who have low production costs to keep one hand on the tap and a hard eye on the other producers. It's the best way I can see to prevent the emergence of the thing you and I and the producers all fear most --- a true Free Market in Oil. (Shudder!!)

From the end of this article biz.yahoo.com Here is a quote:
..."Each time OPEC producers cut production they also lost market share; while a period of sustained low prices would force some of the higher cost non-OPEC producers to reduce their output too," he said. "This is a new era in the oil market in which oil might stay down for some time," Varzi said. "Lower prices have their own supply and demand curve and (would result in) substantially lower non-OPEC production on the five-year view."
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Interesting situation!! I think we may soon see new agreements from OPEC and non-OPEC producers.

regards,

diana
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