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: Crimson Ghost who wrote (34495)	1/8/1999 8:49:00 AM
From: Box-By-The-Riviera™	Read Replies (1) of 95453

Friday January 8, 6:02 am Eastern Time Note: this article has a followup with more information. FOCUS-Oil pushes higher as long supply glut eases LONDON, Jan 8 (Reuters) - Oil prices crept higher on Friday as traders pondered whether recent gains spurred by falling stocks could turn into a fully-fledged recovery. World benchmark Brent pushed up four cents to $11.57 a barrel in early trade, two dollars above 12-year lows recorded in late December. The cautious upturn follows signs that a glut of unwanted oil that plagued producers all last year may at last be starting to ease. Brent flew a dollar higher on Wednesday after the American Petroleum Institute (API) said that the United States had drained nearly 15 million barrels from its bulging crude stocks. London's Energy Market Consultants (EMC) added that the year-on-year stock excess -- which peaked at about 200 million barrels in the summer -- fell to 70 million barrels at the end of December. Even assuming normal seasonal temperatures the surplus should fall below 50 million barrels by the end of the northern hemisphere winter, EMC said. As spare supply wanes so sellers are starting to fetch better prices on oil's day-to-day physical cargo market. And improved prices for prompt cargoes would in turn erase the economic incentive for companies to put oil into storage tanks. This would be a sea change from the pattern that became entrenched last year when consistently weak near-term prices sent excess oil flooding to inventories. Severe delays to exports from Nigeria, where pre-election protests are disrupting production, has further cut buyers' options. Yet with stocks still 200 million barrels in surplus against the better-balanced position of two years ago, prices are still vulnerable to further losses. The lingering threat of oversupply means analysts are calling for additional measures by leading oil producers who have so far garnered little reward from pledged output cuts. OPEC oil production rose to its highest in five months in December as a flagging campaign to revive oil revenues ran afoul of rising Iraqi exports. Output from the cash-pressed cartel edged up by 20,000 barrels per day to 27.45 million bpd, a Reuters survey found. Taking account of higher Iraqi exports, net OPEC compliance with its 2.6 million bpd output cut package dived to less than 50 percent. The group is due to meet in March for its first gathering since a tetchy November meeting when long-standing tensions erupted between key players Saudi Arabia, Venezuela and Iran to scotch any agreement. Kuwait has led calls for the group to convene an earlier meeting. But Venezuelan policy may not become clear until president-elect Hugo Chavez takes office on February 2. (Note: this article is ''in progress''; there will likely be an update soon.)

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