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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: VLAD who wrote (31719)	11/11/1998 6:40:00 PM
From: pz	Read Replies (1) of 95453

Wednesday November 11, 11:52 am Eastern Time FOCUS-Oil recovers as U.S. reinforces Gulf troops By Kate Dourian LONDON, Nov 11 (Reuters) - Oil prices battered by steep losses under a torrent of excess supply recovered slightly on Wednesday after U.N. staff withdrew from Iraq in preparation for a possible U.S. military strike. World marker Brent blend crude oil for December delivery traded 29 cents higher at $12.33 a barrel at 1426 GMT, a mild improvement following a loss of $1.23 late last week when prices fell precariously near to the 10-year lows seen in August. The oil price recovery was on the back of some short-covering following the withdrawal of U.N. weapons inspectors from Iraq in what a U.N. spokesman in Baghdad said was a precautionary safety measure. But the market barely budged on news that the United States had ordered a second aircraft carrier to the Gulf and additional warplanes including F-117 stealth fighters as part of its troop buildup in the region. ''Much of the short-covering against the Iraq situation has been done. For now the market is looking for something more solid to go on -- like the first missile,'' a futures trader said. Iraqi oil exports of some 1.9 million barrels per day (bpd) under the current phase of the oil-for-food programme, which expires later this month would continue uninterrupted, U.N. special envoy to Iraq Prakash Shah said in Baghdad. Oil analysts say the tensions over Iraq, which have simmered since Baghdad suspended cooperation with U.N. arms inspectors two weeks ago, have been factored into the price, which remains more than $6 below last year's average. They point out that with oil stocks in industrialised nations at high levels, it would take a very big supply disruption to have any impact on prices given that producers have already taken out some 3.1 million bpd from the market so far this year without much improvement in price. The International Energy Agency (IEA), the Western world's energy watchdog, said in its recent oil market report that commercial stocks in Organisation of Economic Cooperation and Development countries were 172 million barrels higher at end September than the same time last year. The Organisation of the Petroleum Exporting Countries holds its biannual meeting in Vienna on November 25 amid signs its leading members are opposed to further production curbs. OPEC members have watched helplessly as the crude stockpile and falling demand has frustrated their efforts to raise prices by agreeing a 10 percent cut in production this year. Venezuelan Energy Minsiter Erwin Arrieta reiterated on Wednesday that his country was not considering any new oil production cuts to shore up prices. That view has been echoed by OPEC giant Saudi Arabia, whose minister Ali al-Naimi is likely to see Arrieta in Buenos Aires on Wednesday where both are attending climate talks. Arrieta said he may discuss market conditions with Naimi if the opportunity arose on the sidelines of the conference. Prices in dollars per barrel: Nov 11 Nov 10 (1431 GMT) (close) IPE December Brent 12.32 12.04 NYMEX December light crude 13.73 13.52

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